Aug. 17 (Bloomberg) -- E.ON AG, the world's largest utility, said the coming winter will be ``challenging'' for energy supply in the U.K. as North Sea reserves dwindle, raising the need to import more gas.

E.ON, whose Powergen Plc unit supplies natural gas in the U.K., wants to build a new underground gas-storage facility in East Yorkshire because of an ``urgent'' need for capacity to store the fuel in Britain, the Dusseldorf, Germany-based company said today in an e-mailed statement.

``We are once again about to go into a winter which will be challenging for energy companies,'' E.ON's U.K. Chief Executive Paul Golby said in the statement. ``The U.K. needs gas-storage facilities to come on line to ensure security of supply and help stabilize energy prices.''

The price of storage is rising as fields in the North Sea run out of gas, forcing Britain to rely on fields farther away and on imported gas. Gas prices in Britain, the European Union's biggest consumer of the fuel, have risen about 60 percent in the past year, partly because the country has less storage than other European nations.

``It's essential that gas-storage projects, like the one we're proposing, are seen as nationally important,'' Golby said.

Gas Prices

Gas and electricity prices rose to a record last winter in Britain because a fire shut the nation's biggest gas-storage unit, reducing supply to power stations and factories by 10 percent.

E.ON also said today it will charge higher household tariffs in Britain and the German state of Bavaria, citing the need to pass on rising energy costs.

Powergen, E.ON's retail unit in the U.K., will raise gas prices by 18.4 percent and power prices by 9.7 percent starting Aug. 21.

In Bavaria, E.ON will raise natural-gas prices from Oct. 1. Households and small businesses will have to pay 63 cents more per kilowatt-hour, E.ON said.

The U.K. keeps some 4 percent of its gas demand in storage, compared with an EU average of 15 percent, according to Centrica Plc, the U.K.'s biggest energy supplier. Germany stores about 25 percent of its gas demand, while France stores 20 percent.

Centrica, which runs Rough, Britain's largest natural-gas storage unit, said it is receiving interest from new customers to store gas at the facility. Rough, a converted North Sea field located about 18 miles (29 kilometers) off the coast of Yorkshire, can meet about 10 percent of U.K. demand on the coldest days.

``We continue to see healthy interest from existing customers and potential new customers looking to take up storage capacity at Rough, both in the short term and for possible multiyear options,'' Andrew Hanson, a Centrica spokesman, said in an e-mail yesterday.

Centrica has more than 15 customers who store gas at Rough. Customers include traders, power stations and gas suppliers, Hanson said.

To contact the reporter on this story: Dale Crofts in Amsterdam at dcrofts@bloomberg.net; Renee Lawrence in London at rlawrence7@bloomberg.net

Last Updated: August 17, 2006 06:51 EDT