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 18th 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 18th 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 18th 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 18th 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
- 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
- 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 3rd 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.
- 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
- 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.
- 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.
- 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 6th 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 20th January 2012.
- 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.
- 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.
- 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.
- 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.
- What discount did you previously offer to customers paying promptly
The prompt pay discount was previously 3% for customers paying by cash or cheque.
- 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.
- 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).
- 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.
- 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.
- Do customers receive these discounts automatically?
Yes. These discounts are applied automatically.
- 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
- 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.
- 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.
- 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.
SOURCE E.ON UK