- Gas price decrease of 6% making E.ON cheaper than British Gas
- Bills overhauled to improve simplicity, following customer feedback
E.ON has today (Monday) announced it will decrease gas prices for its residential customers1 effective from 31 March 2010. The company is also simplifying its bills so they are clearer and easier to understand.
The decrease means customers paying by monthly Direct Debit will save £42 off their annual gas bills, making E.ON gas customers on average £26 a year better off than if they were with British Gas2. This is the third price cut announced by E.ON in just over 12 months.
E.ON’s most vulnerable customers, who take the E.ON WarmAssist product, will benefit even sooner and see a greater reduction in bills from 1 March3.
Following extensive research with customers the company will also be sending out new design bills throughout spring. These have been clarified and simplified, making the key information more prominent so they are easier to understand.
Graham Bartlett, Managing Director of E.ON’s Retail business, said: “We’ve been very aware of the effect of both the recession and the exceptionally cold winter on our customers, especially those most in need, so we are pleased to see the opportunity to now reduce prices.
“The fall in current wholesale prices is only part of the pricing story as our customers are using gas bought over a number of years at much higher prices than today.
“In addition, our customers have been telling us that their bills need to be clearer, better laid out and easier to understand. We’ve listened, and our new bills have all the relevant information up front so our customers can see exactly how much energy they’re using and hopefully where they can make savings.
“Alongside all of that work, we’re also investing hundreds of millions of pounds every year to ensure that we can not only keep the lights on and homes warm but also to reduce carbon emissions and to keep bills as affordable as we can.”
Having offered one of the lowest gas prices throughout last winter, E.ON is now cheaper than British Gas for standard single gas. So why not get a quote today?
Some extra information on our price change
What are E.ON announcing?
How much does this equate to?
Why is this decrease so small - haven't wholesale prices reduced much more?
Why is this decrease on gas only?
How many customers will benefit from this decrease?
What impact will this price decrease have on your electricity customer's bills?
Why are you not cutting electricity prices for the rest of your customers?
What impact will this have on your gas prepayment meter customers?
Does this announcement affect SME customers too?
Who will be receiving a new bill? And When?
What is different about these bills?
Why have you changed your bills? Why not just decrease your prices more instead?
What are E.ON announcing?
We are announcing a decrease in our gas price by 6% for the majority of our residential customers. This is effective on 31 March 2010.
How much does this equate to?
The change will mean customers will see a decrease of around £42 on their annual gas bills from 31 March 2010, based on the Ofgem averge of 20,500 kWh per annum paying by fixed monthly Direct Debit.
This move makes us on average £26 cheaper than British Gas for standard gas.
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Why is this decrease so small – haven’t wholesale prices reduced much more?
Energy remains a volatile market, we’ve always said we will reduce prices for our customers as soon as we can and this is the third decrease we have announced in just over 12 months - cutting over £100 off the average annual dual fuel bill. (9% electricity effective 31 March 2009, 3.3% gas effective 4 July 2009.)
Having offered one of the cheapest gas products throughout last winter, we are now cheaper than British Gas for standard single gas.
We buy electricity and gas in advance to help smooth out the fluctuations in supply and demand that can cause spikes in wholesale prices. As such, the cost of the gas and electricity customers are using today to keep their lights on and heat their homes is a mixture of all the prices that we have paid for gas and electricity in the past when wholesale costs were, overall, much higher than they are today.
Wholesale costs only account for around 60% of household energy bills, there are lots of other charges that make up customers bills, such as distribution and transmission costs, meters, VAT as well as environmental provisions.
Why is this decrease on gas only?
We are only able to pass through a decrease on gas at this time.
At E.ON, we’re committed to ensuring that we offer competitive prices, and continue to monitor the cost of wholesale prices. This is the third decrease we have announced in just over 12 months cutting over £100 the average annual dual fuel bill.
How many customers will benefit from this decrease? Around 1.9 million.
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What impact will this price decrease have on your electricity customer's bills?
Customers with electricity and no gas will see no change.
Why are you not cutting electricity prices for this rest of your customers?
This is the third decrease we have announced in just over 12 months, cutting over £100 off the average annual dual fuel bill and are unable to make any further decreases at this time. We are committed to ensuring we offer reliable, affordable energy for our customers at competitive prices.
What impact will this have on your gas prepayment meter customers?
Gas prepayment meter customers will see a decrease on their bills of around 6% based on an average annual consumption of 20,500kWh.
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Does this announcement affect SME customers too?
Our business prices move independently to our residential prices. We continue to offer a range of competitive products for our small business customers and always welcome the opportunity to discuss which of these may be most suitable for them.
Who will be receiving a new bill? And when?
All of E.ON’s residential customers will be receiving newly designed bills throughout spring. We aim to ensure that everyone is receiving these new bills by 1st July 2010.
What is different about these bills?
We’ve changed the format and the layout so that it is easier for our customers to see exactly what the status of their account is e.g. how much energy they’ve used, how much they owe and what action needs to be taken.
We’ve completely revised the front sheet of the bill to give customers a clear snapshot of their account status and any action required. We’ve also introduced a key facts sheet which summaries which product a customer is on, if it has an end date and a forecast of costs for the coming year. The language used in the bill has also changed and we’ve removed jargon to make the bill more clear and easy for customers to understand.
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Why have you changed your bills? Why don’t you just reduce your prices more instead?
Our customers have told us that they want clearer, better laid out and easier to understand bills. We’ve listened and our new bills have all the relevant information upfront, so our customers can see exactly how much energy they’re using and hopefully where they can make savings. The bill is one of the main ways we communicate with our customers and it’s important to us that we use it to clearly communicate which is why we’ve made these changes.
¹ = Around 1.9 million residential gas customers will benefit from this gas price decrease of around £42 equivalent to 6%;
2 = Based on Standard gas prices and inclusive of VAT paying by fixed monthly Direct Debit with an annual average gas consumption of 20,500kWh. Excludes certain tariffs such as StayWarm and fixed tariffs.
3 = Prices for E.ON WarmAssist were reduced from 1st March 2010. Customers on E.ON WarmAssist will on average benefit from a £57 saving off their bills based on annual average gas consumption of 20,500kWh and electricity consumption of 3,300kWh.
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