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E.ON Announces Average Dual Fuel Price Increase of 3.7%, Effective From 18th January 2014



 E.ON Announces Average Dual Fuel Price Increase of 3.7%, Effective From 18th
                                 January 2014

  PR Newswire

  NOTTINGHAM, England, December 9, 2013

NOTTINGHAM, England, December 9, 2013 /PRNewswire/ --

  * Dual fuel (variable) average increase: 3.7% (£48) ^(1)
  * Electricity only (variable) average increase: 3.7% (£20) ^(1)
  * Gas only (variable) average increase: 4.6% (£37) ^(1)

E.ON has today announced that from 18 ^th January 2014 its energy prices for
existing standard variable dual fuel customers will be on average 3.7% higher.

For the second year running E.ON has announced an increase later than any
other major supplier and has once again shown it is working hard to limit the
impact on its customers by announcing a lower average percentage rise than any
other major supplier.

Other key customer aspects:

  * Simpler discounts, greater value: E.ON has changed the way it offers
    discounts to customers, moving from percentage to pound values. This means
    that even with today's price rise, around one in four E.ON customers will
    see lower bills than before. This is simply because the pound value is
    higher than the percentage discounts some customers would have seen on
    their bills.
  * Price Alert: E.ON will automatically tell customers on fixed deals of new
    cheaper deals if / when they are offered. Customers registered online and
    on fixed tariffs will automatically be told (via email) of new deals which
    may offer better value, when they are introduced.

Commenting on today's announcement Tony Cocker, Chief Executive, E.ON UK,
said:

"There is no escaping the simple fact that any price rise is unwelcome news
for customers.  We know that, which is why we have held off for longer than
most of our competitors and worked hard to keep our rise as low as possible. 
However, now more than ever, the help we offer our customers, in terms of
advice and practical measures, is absolutely vital.

"We have moved quickly to pass on the benefits of changes announced by the
Government at the beginning of this week. This means we have reduced the
overall level of a rise that is necessary to cover the extra costs we are
seeing in some areas, as well as making sure we continue to deliver a
sustainable future for all of our employees and maintain our investment in the
UK.

"Whilst there can be no guarantees, the likelihood of further price rises over
the next 18 months caused by an increase in the cost of social and
environmental obligations has receded due to the recent action taken by the
Government."

E.ON has outlined how the change in Government environmental and social
schemes will be implemented, along with many other changes to make its
products simpler and more comparable.

Some of these key aspects are:

  * Savings that E.ON will see as a result of the Government changes will be
    passed on in the simplest and fairest way:

       * Customers on standard variable tariffs will see their prices change.
         Customers already on fixed deals will, in the majority of cases,
         still be on products that are lower in price than the altered
         tariffs.
       * All electricity customers will receive the full £12 Government rebate
         that relates to the change in funding of the Warm Home Discount. This
         follows the policy set out by the Government and is the same for all
         suppliers.
       * In addition, E.ON is launching new fixed products which will have
         these changes built in. Customers on existing products can switch to
         them without charge at any time.
       * The savings that E.ON will see as a result of the alterations to
         environmental and social obligations will be passed on in the form of
         a change to the standing charges that are part of standard variable
         products. This means customers on standard variable tariffs will
         benefit from 18 ^th January 2014 and our new fixed products will
         reflect these savings.
       * This was the fairest way possible to pass on the savings E.ON will
         see as a result of the changes and a way of maximising the savings
         for a huge number of our customers. It must also be remembered that
         all electricity customers will receive the £12 rebate, without
         exception.

Breakdown of the average dual fuel price rise announced today and effective
from 18 ^th   January 2014

    The different parts of a domestic bill                      % rise / - % fall   Value

    The cost to buy the energy our customers need

    The price we pay on the energy market for buying
    the electricity and gas we sell to our customers.                  0.9%         GBP11

    Getting our energy to our customers' homes

    These are the costs we have to pay other companies
    to use their pipes, wires and cables to transport
    electricity and gas to our customers' homes.                       2.0%         GBP26
    Looking after our customers

    The cost of running our call centres, billing plus
    reading, fitting and maintaining meters etc.                       0.7%          GBP9

    Delivering social obligation programmes

    As part of Government programmes, we work to improve
    poorer quality homes to make them warmer and more
    energy efficient. This is the area in which the
    Government announced recent policy changes. These
    changes account for the reduction shown.                          -1.4%        -GBP18

    Supporting cleaner energy

    This is the amount that goes towards Government
    funding for renewable energy, like windfarms.                      1.2%         GBP16

    The money we earn

    The amount we're left with when all other costs
    from supplying homes with energy are taken into
    account. The figure shown is the amount of this price
    rise that will impact on the amount we earn.                       0.3%         GBP4

                                                                     Total:      Total*:
                                                                     3.7%(1)       GBP48

* = This rise is £30 lower than would otherwise have been the case if the
Government had not made its recent announcement outlining a number of changes.
These included reducing the Energy Company Obligation (ECO) scheme and a
voluntary agreement by networks companies to reduce network costs which
together deliver a decrease in costs to customers' bills. The other
environmental levies, such as the Renewables Obligation are unaffected, which
is reflected above, but the changes made in ECO will more than offset the
expected rises in these items - so overall there will be a meaningful net
reduction in environmental and social costs. All electricity customers will
also receive a £12 rebate on top of the £30 net reduction. A total net
reduction of £42 can therefore be attributed to the changes announced.

E.ON is also changing its products to make them simpler, easier to compare and
compliant with Ofgem's Retail Market Review (RMR).

Major changes include:

  * Discounts - simple and fair. Now provided as a clear monetary value, not a
    percentage discount.
  * From 18 ^th January 2014, E.ON customers can receive:

       * £20 a year for having a dual fuel account
       * Up to £10 a year for paperless billing (£5 per fuel)
       * Up to £70 a year for paying by Fixed Monthly Direct Debit (£35 per
         fuel)

  * Loyalty - rewards will be available for all of residential customers who
    have an electricity or dual fuel account and opt in to E.ON Reward Points.
    Customers will be awarded up to 1,500 E.ON Reward Points a year, which are
    accrued on a daily basis and awarded monthly. These points can be
    exchanged either for Tesco Clubcard points or Bonusbonds (vouchers for the
    high street).

FAQ and key details of the price rise announcement and the changes being made
to move E.ON towards full Ofgem RMR compliance

Helping customers

 1. What are you doing to help your customers save money and ensure they are
    on the best deal for their needs? Over a year ago we launched our 'Best
    Deal For You' online tool, now offering a set of four tariffs. Consumers
    can find the best E.ON deal for them by visiting
    http://www.eonenergy.com/bestdeal or by phoning 0330 400 1009. We are
    committed to helping our customers use no more energy than they need so we
    have launched the Saving Energy Toolkit, an easy-to-use online tool which
    allows customers to better understand and control their energy use. The
    Saving Energy Toolkit shows people where their energy is being used, when
    they use the most and how they compare to similar nearby homes. By showing
    them this information we hope that our customers will feel more in control
    and ultimately take action to use only the energy they need. Advice on how
    to save energy can also be found at
    http://www.eonenergy.com/for-your-home/saving-energy
 2. What are you doing to help your vulnerable customers and those most in
    need? For customers who are struggling to pay their bills, we can offer
    practical debt advice, home visits and information on funding schemes
    either from E.ON or third parties. Since the Warm Home Discount came into
    effect on 1 April 2011, like other major suppliers we have offered rebates
    to our electricity customers who meet the eligibility criteria; £135 per
    household during 2013/2014. In 2012/13 we helped around 284,000 E.ON
    customers though the Core Group and Broader Group rebates with spend
    around £37m. New applications to this year's scheme closed on 3 ^rd
    December but E.ON expects to help significantly more customers in 2013/14.
    Our Caring Energy support team can talk to customers about their
    individual circumstances to provide help or signpost other routes to
    access potential assistance. Other initiatives to help our vulnerable
    customers include helping around 10,000 households (not necessarily E.ON
    customers) through the Age UK Industry initiative with spend around
    £750,000. These customers primarily benefit from a Benefit Entitlement
    Check with the average recipient benefiting by an increase in income of
    over £2,000 a year. In addition, we've spent around £200,000 on the
    supplier funded industry initiatives of Energy Best Deal (run by the
    Citizen's Advice Bureau) and the Home Heat Helpline. Both of these
    services provide free advice to consumers on energy related topics.
    Customers on our WarmAssist tariff will be protected from this rise and
    E.ON guarantees no rise for WarmAssist customers during this winter.
    Products
 3. New Ofgem rules mean you can only offer four core tariffs, what are your
    core four tariffs? E.ON Energy Plan (Standard - evergreen variable) E.ON
    Energy Fixed 1 Year v6 E.ON Energy Fixed 2 Year v5 E.ON Age UK Fixed 2
    Year
 4. How many customers do you have on fixed and capped tariffs? Today we have
    just over one million customers on fixed deals. Around 500,000 of these
    customers are on fixed deals that end more than six months after the
    effective date of this price change.
 5. How much is the exit fee for customers that wish to leave your fixed
    tariffs? The exit fee for most products is £5 per fuel for one-year deals
    and £10 per fuel for two-year deals, though some older products differ.
    However, E.ON customers wishing to switch to an alternative E.ON tariff
    will not be charged a fee. No cancellation fee is applied to our Age UK
    tariff.
 6. You still have customers on other tariffs such as StayWarm and WarmAssist,
    are you breaking RMR rules? No. Customers still on our StayWarm tariff
    will be able to stay on the product until the end of their contract, for
    which renewals ceased after 6 ^th October 2013. For customers on
    WarmAssist, we requested that they are allowed to remain on this tariff if
    they so wish and this has been agreed with Ofgem.  WarmAssist has not been
    open for customers to switch to since 20 ^th January 2012. Migration
 7. Do you have customers on historic tariffs which you will now move to your
    standard offering? Yes. We have written to affected customers to notify
    them that their tariff is no longer available and that we will be moving
    them to our standard offering (as required). We recommend and hope
    customers get in touch to have 'Best Deal For You' conversations or use
    our on-line tool to find our best available tariff for their needs.
 8. Which tariffs does this relate to that you no longer offer? Customers on
    our Energy Online, Go Green or Age UK variable products will be moved to
    our standard offering but we hope to have 'Best Deal For You'
    conversations with them about whether there is a better or more suitable
    product for their needs. We will continue to offer Age UK fixed products
    exclusive to the over-60s. For customers on Energy Discount we will be
    honouring the 3% discount below standard, until the end of their term,
    however terms and conditions will change. Standing Charge
 9. Do you charge a standing charge? Yes. We apply a standing charge to our
    tariffs; this is: £95 (around 25p a day) for electricity £115 (around 30p
    a day) for gas For customers who pay by Fixed Monthly Direct Debit we
    offer a reduction on the standing charge for each fuel of £35 per year.
    Discounts
10. Do you offer a reward for paying promptly No. This is something we no
    longer offer following the introduction of the new Ofgem RMR rules.
11. What discount did you previously offer to customers paying promptly The
    prompt pay discount was previously 3% for customers paying by cash or
    cheque.
12. When was the prompt pay discount removed? This discount is no longer
    available to new customers from today. Existing customers on (or moving
    to) our standard product will see this discount removed from 18 January.
    Customers on fixed term tariffs will retain their existing discounts until
    their renewal date.
13. Do you offer a discount for customers taking both fuels? Yes. We offer an
    annual discount of £20 to all customers who take both fuels. (This is
    accrued daily).
14. Do you offer a discount for customers paying by Direct Debit? Yes. We
    offer a reduced standing charge to customers paying by Fixed Monthly
    Direct Debit. This is £35 per fuel, per year.
15. Do you offer a discount for customers who manage their account / bills
    online? We offer a discount to customers who choose to receive paperless
    bills of £5 per fuel per year.
16. Do customers receive these discounts automatically? Yes. These discounts
    are applied automatically.
17. How much can customers save? If customers choose to pay by Fixed Monthly
    Direct Debit with paperless billing and take both fuels from E.ON, they
    can save a total of £100. £20 a year for taking both fuels £10 a year for
    taking paperless billing (£5 per fuel) £70 a year for paying by Fixed
    Monthly Direct Debit (£35 per fuel) Total = £100 Rewards and Loyalty
18. What rewards to you offer to your customers? Customers have the capacity
    to earn reward points, which can be exchanged for vouchers for the high
    street or Tesco Clubcard points. Customers must have an electricity or
    dual fuel tariff and opt in online or by phone to activate / receive these
    rewards.
19. You no longer offer the Age UK cold weather payment; will you be honouring
    it for this winter? Yes. We will be honouring this payment for this winter
    but going forward this is something the new rules mean we're no longer
    able to offer. Price Alert
20. Do you automatically tell customers on your fixed deals of new cheaper
    deals when they are offered? Customers on fixed deals will automatically
    be told of new cheaper deals if / when they are offered. Customers
    registered online and on fixed tariffs will automatically be told (via
    email) of a new deals which may offer better value, when they are
    introduced.

 

Notes to editors:

1 = At current Ofgem average annual consumption of 3,300 kWh unrestricted
electricity and 16,500 kWh gas, across all payment methods and regions.
Includes all changes to Direct Debit, prompt payment and dual fuel discounts.

  * E.ON is one of the UK's leading power and gas companies - generating
    electricity, retailing power and gas, developing gas storage and
    undertaking gas and oil exploration and production. It is part of the E.ON
    group, one of the world's largest investor-owned power and gas companies.
    E.ON employs around 12,000 people in the UK and more than 72,000
    worldwide;
  * In the UK, E.ON supplies power and gas to around five million domestic,
    small and medium-sized enterprise and industrial customers. E.ON also
    offers innovative energy services and technologies tailored to meet its
    customers' needs, and is helping customers become energy efficient by
    encouraging them to insulate their homes, moderate their energy usage and
    even generate their own power;
  * E.ON has been voted Britain's best energy supplier for the second year
    running in the uSwitch.com Customer Satisfaction Awards. The independent
    report and awards are published annually and are based on a YouGov poll of
    over 5,000 energy customers;
  * E.ON discusses changes with its customers through its 28,000-strong
    YourSay panel and its 1,000-strong MySay employee panel, and also through
    conversations with consumer advocacy groups. Improvements made to date
    include new tools to help customers use no more energy than they need,
    simpler products, transparent profits, fair prices, easier contact, and
    the confidence to complain;
  * E.ON's generation portfolio includes world-class gas-, coal- and
    biomass-fired power stations. E.ON is a market leader in combined heat and
    power (CHP), and is one of the UK's leading green generators;
  * One of the many ways E.ON leads the energy industry is through its
    commitment to market liquidity and transparency as evidenced by its
    actions on the day-ahead UK power markets including the N2EX auction. E.ON
    was the first company to sign a gross-bidding agreement with N2EX.

 

Contact: Media contacts: Victoria Blake (+44(0)2476-181-304); Andrew Barrow
(+44(0)2476-183-677) ; Roxanne Postle (+44(0)2476 195 785) ; Scott Somerville
(+44(0)2476 183 438)
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