Financial News

  • 11 December 2012, 13:13

E.ON Is Last Of 'Big Six' To Raise Energy Bills

The last of the major energy firms to confirm its winter price rises, E.ON, has said its bills will be going up from January 18.

The company is writing to customers to inform them of their plans, which will see the average dual fuel bill rise by 8.7%.

It blamed the increase on rising wholesale prices for energy and other factors such as rising network costs.

The announcement was seized upon by price comparison experts who claimed the increase would take the average UK dual fuel bill to a new record high.

E.ON said the move would mean the average electricity-only price rising by 7.7% with average gas-only prices going up by 9.4%.

But around one in six of its 4.8 million customers would endure no increase at all, the company said, because they were on either capped or fixed products.

Chief executive Tony Cocker said: "We have held back from increasing our prices for as long as we possibly could and at the same time have worked hard to reduce our own costs as a business so that our customers can get the best price possible.

"However, some 16 months after our last price increase, and almost a year since we actually cut our electricity prices, we have had to make the difficult decision to increase our prices."

He explained: "In the next few days every customer affected by this price change will receive a letter from us explaining the detail behind this announcement.

"Wherever we can, we will include the likely impact on the customer's own bill. However, as well as the individual impact, the broader question is not what we are doing but why we are doing it.

"We have worked hard to reduce our own running costs which include tasks such as reading and changing meters, answering queries and managing our customers' accounts."

Mr Cocker also moved to defend E.ON from any suggestion that it was ripping off customers through price rises.

He said: "We also believe our profit levels are fair and will continue to be so.

"Last year our domestic profit margin was less than 2% and we will make public the amount we make this year when we publish our 2012 results.

The company had pledged not to raise its prices during 2012 and was accused today by the founder of MoneySavingExpert.com, Martin Lewis, of being "disingenuous".

Price comparison website uSwitch said the move would take E.ON's average dual fuel bill from 1,260 a year to 1,370 and would make the company the most expensive supplier for standard cash and cheque customers.

The decision also meant, uSwitch said, that the average household energy bill had reached a new all-time high of 1,352 a year - a 23% increase since January 2011.

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