E.ON announces 4.8% dual fuel increase effective 16th August 2018
A number of costs have risen quite sharply and in particular we’ve experienced a hike in the price we have to pay for the energy our customers need, partly driven by the Beast from the East and extreme weather conditions experienced earlier this year. Through advanced purchases we had been able to shield our customers from some, but not all, of this impact.
E.ON has today [Tuesday] announced that due to the significant rise in the cost of wholesale energy, and in common with similar pressures faced by a number of other suppliers of all sizes across the industry over recent months, it is increasing its standard variable electricity and gas prices.
On 16th August 2018 the unit price of E.ON’s standard variable tariff, E.ON EnergyPlan, will increase by an average of 4.8% or £55 for customers taking both fuels, 6.2% or £36 for electricity only customers and 3.3% or £19 for gas only customers(1).
Over the last year E.ON has contacted around 1.8 million standard variable tariff customers advising them that cheaper tariffs could be available and over the last 18 months the number of E.ON standard variable accounts has fallen by around 21%. Over 2 million customers on existing fixed tariffs and those covered by the prepayment and safeguard cap are unaffected by this change.
Michael Lewis, Chief Executive of E.ON UK, said: “We had hoped that by making the structural changes we made earlier this year, impacting bills by around £22(2) a year, we could avoid an increase in our unit price. Those changes applied to all tariffs, not just our standard variable tariff, and reflected cost changes as we saw them at the time as well as bringing our tariff structure in line with most of the market.
“However as was seen in relation to the increases in the regulated prepayment cap in April, a number of costs have risen quite sharply and in particular we’ve experienced a hike in the price we have to pay for the energy our customers need, partly driven by the Beast from the East and extreme weather conditions experienced earlier this year. Through advanced purchases we had been able to shield our customers from some, but not all, of this impact.
“We’ll continue proactively to tell customers about the different tariffs on offer and encourage them to move to those tariffs, as well as promoting the different services that can potentially help bring their bills down such as a smart meter, a more efficient boiler or better insulation.”
This is the second unit price increase E.ON will have made in over four and a half years in a time period when the company has cut prices on two occasions. Since E.ON last increased its standard unit prices in April 2017, wholesale energy costs have increased significantly with increases of 22% seen since March 2018. This is largely due to the impact of the extremely cold temperatures earlier this year depleting European gas storage, along with middle eastern politics which have caused prices to increase dramatically. Policy costs, such as the Renewables Obligation (RO), Electricity Market Reform (EMR) and Feed in Tariffs (FITs) have also increased during this time.
E.ON is committed to both improving customer engagement in the energy market and keeping prices as affordable as possible. E.ON will be writing to affected customers in the coming weeks to notify them of this change and will continue to work hard to offer choice and to advise customers of savings they could make on the cheaper tariffs available.
Notes to editors
1 = Based on Ofgem average annual consumption of 12,000 kWh for gas and 3,100 kWh for unrestricted electricity, the standard variable dual fuel bill will be £1,208 a year with payment by fixed monthly Direct Debit, £617 a year for single electricity customers and £591 a year for single gas customers, Effective 16 August 2018.
2 = Across all bill choices, payment methods and fuel combinations for customers on E.ON EnergyPlan.
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