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E.on customers facing 100 rise in energy bills as company becomes last of the 'big six' to raise tariffs
German-owned supplier will put gas and electricity prices up on January 18
Families on dual fuel contract will pay an extra 103 on average annual bill
23:41 GMT, 10 December 2012
Millions of E.on customers face an increase of more than 100 a year in energy bills after it announced a rise in tariffs.
The company, which will put up prices from January 18, is the last of the ‘big six’ suppliers to hit customers with an increase.
E.on blamed higher wholesale prices, coupled with the cost of cutting the nation’s carbon emissions through a shift to green energy. It also pointed to Government policy which requires companies to add money to bills to fund the installation of free insulation for elderly and vulnerable customers.
Prices are on the move: E.on is the last of the 'big six' energy suppliers to put their prices up
The German-owned firm is putting up gas by 9.4 per cent and electricity
by 7.7 per cent, which will squeeze the cost of living for some
4.8million customers. Families who have a dual fuel contract will pay an
extra 8.7 per cent – 103 a year, with the average annual bill rising
Director of consumer policy at uSwitch.com, Ann Robinson, said: ‘As winter temperatures plummet, consumers could buckle under the strain of higher energy prices.
‘This winter almost nine in ten households are expected to ration their energy use to save on bills.’
Heating up: Price rises had been expected at the gas and electricity supplier after it said there would be no increase before the end of the year
A graph showing a breakdown of E.on energy costs rises
'The fact is that high energy prices have a big impact on consumers and leave many unable to turn on their heating for fear of running up a large bill.’
Director of energy at the official customer body, Consumer Focus, Audrey Gallacher, said consumers doubt whether the recent industry price rises are justified.
She warned: ‘Higher energy prices will be, yet again, the greatest concern for many households this winter.
‘Bill payers need to know that wholesale prices and other costs have increased enough to justify these rises. As it stands the pressures on price are just too opaque and contested to provide confidence.’
THE LATEST ENERGY PRICE RISES
E.on was the last of the six big energy firms to announce its price increase:
SSE (from October 15) – Both gas and electric up 9 per centBritish Gas (from November 16) – Both gas and electric up 6 per centNPower (from November 26) – Gas up 8.8 per cent and electric up 9.1 per centScottish Power (from December 3) – Both gas and electric up 7 per centEDF (from December 7) – Both gas and electric up 10.8 per centE.on (from January 18) – Gas up 9.4 per cent and electricity up 7.7 per cent
E.on made clear that government policy and its pressure to support wind, solar and other low carbon sources for electricity is driving up bills.
It said the cost of renewable energy schemes, building new networks of pylons to connect wind farms to the national grind and funding social schemes to insulate homes is rising fast.
E.on 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.’
He insisted the company’s profit margin of around two per cent last year was fair.
But he said, ‘Unfortunately the other costs which make up energy bills are rising.
‘The price we pay for energy on the national and global wholesale markets is higher than it was and next year the Government’s Carbon Price Floor will add another charge to electricity bills which we and others regard as simply a tax.
‘Network costs are rising too. These are the prices we pay to other companies to use the wires and pipes which transport the energy to your home, which are now more than 10per cent higher than last year and are expected to climb higher still in 2013.
‘The cost of the Government’s social schemes, which often focus on providing subsidised or free insulation, have more than doubled in the last 12 months and another increase is expected next year too.
‘Finally, the cost of increasing the amount of energy we get from renewable sources such as wind farms, has risen by over 60 per cent when compared with last year. As with the other costs, this is expected to rise in 2013 too.’
Mr Cocker said while energy firms are under fire for their role, Government ministers also need to explain how their decisions are driving up bills.