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E.ON: Why we had to increase our prices this January

A note from David Bird, Customer Operations Director, E.ON UK on why the supplier felt it had to raise its price.

David Bird, Customer Operations Director, E.ON on why the supplier raised its prices

David Bird, Customer Operations Director, E.ON

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 in January.

The big question beyond what have we announced, is one we must and will answer – why are prices going up?

The truth is we’ve worked hard to get our running costs down and these are lower this year than last. We also believe our profit levels are fair and will continue to be so.

In 2011 our domestic profit margin, the amount we make from providing you with electricity and gas, was less than 2% and we’ll make public the amount we make this year when we publish our 2012 results.
But the other costs which make up energy bills are going up:

  • The price we pay for energy on the national and global wholesale markets is higher than it was. Next year the Government’s Carbon Price Floor will add another charge to electricity bills; we and others regard this as simply a tax.
  • Also on the up are network costs – the prices we pay other companies to use the wires and pipes which transport energy to your home; these are now more than 10% higher than last year and are expected to climb higher still in 2013.
  • Costs associated with the government’s social schemes have more than doubled in the last twelve months and another increase is expected next year.
  • And finally, the cost of increasing the amount of energy we get from renewable sources has risen by over 60% compared to last year and this is expected to rise in 2013 too.

What makes up an average weighted E.ON dual fuel bill?

We can’t control these external costs, but we can and will do whatever we can to help our customers. From help to stop heat escaping from homes to offering fixed products that offer certainly, we’re doing a lot.

David

Learn more

E.ON raises its prices by 8.7%

  • lkbrooks

    I have been an e.on customer for a few years and I am annoyed that they are putting up the price yet again, it is harder on those of us that only have one wage coming in the home, and you say that it has been some 16 months since you put the price up the last time, and that it is a year since you put the price down. But you forget to mention that you did not put the price down the same amount as you put it up some months previously. The price of energy is putting those of us on one wage at a point that we cannot afford to have the heating on and more and more people on low wages are suffering.

  • PV70

    You simply need to shop around. Last year I was with EDF, now I’m with First Utility. I simply pick up the cheapest available tariff and switch. It’s not as complicated to switch as some people think!

  • An Annoyed EON customer

    rip off Britain, Eon are you not making enough profit ????

    “Net profit for the six months to the end of June came in at 3.13bn euros ($3.84bn; £2.45bn), up from 948m euros in the same period last year”

  • Johnny60

    Its same as the other big 5 suppliers pure greed and they get away with it in rip off
    britain

  • BILL FROM BIRMINGHAM

    David bird.what’s your income.do you sit in a cold house with your coat on.and what are your profits for you and your shareholders. RIP OUT OUR GAS FIRES AND START BURNING ALL OUR OLD FURNITURE AND RUBBISH. PURE GREED.

  • Andy Hill

    I was going to switch back to this company but I don’t know whether I should now. Thanks Eon for giving me a reason not to leave greedy NPower. Nothing but pure unadulterated greed from the energy companies make heating a luxury rather than the necessity that it is.

  • Dave HH

    Simple: Try FIRST UTILITY!

  • SS

    Don’t overlook the substantial contribution to the rise forced on the company by the Government ( Social Contributions).

  • Dee R

    I’ve just switched to E.ON, in fact my first direct debit is due this month. Wonder if I can switch again to a supplier with more integrity, in case there is one somewhere!?!

  • SteveA

    The government have happily forced companies to increase (more expensive) renewables, whilst knowing that this will also increase the network costs that form part of each consumers bill. Putting a tax on carbon (which particularly increases the costs of power from coal stations) will further increase bills, but the Government wins via added revenue for the Treasury and an indirect subsidy for nuclear. Whilst it is sensible to seek to reduce CO2 emissions, this was always going to cost more and the government have been slow to admit this publicly.

    • Michael Martin-Smith

      quite right- this is totally unacceptable. Carbon taxes are a fraud, just as Global warming caused but humans is a con. Global warming has been static for 15 years. We should frack shale gas in the UK- and enfranchise six new non Cartel companies to do it. It is a disgrace that a first world nation should suffer fuel poverty of 70 % of its people.
      If the governemnt does not drop Green taxes and force an opening up of energy supplies by 2015, it should be voted out. Politicians are disposable!

  • colin

    The government certainly take their share via the back door as usual and then hide behind and demonise the energy companies. Who do you think is paying for all those bloody windmills and solar feed in tariffs? Yep, us mugs.

  • instead of making excuses and “ripping ” off your customers try reducing the fantastic profits you already make and reduce what you pay your shareholders it isnt rocket science!!!

  • abouttoimmigrate

    Greed, just greed. But, not everyone is in the EDF or First Utility catchment area, so some do not have a choice.
    They all said that Smartmeters were such a great idea, and listed dozens of reasons from lower bills to lower costs due to not having to have meter readers. None of that is true. The bills are 4x higher and the meter reader still demands entry. Boycotting tuna got industry attention to make changes. One day a month, I boycott all electricity and gas use -no money for my provider (beyond standing charge). And speaking of standing charges, I am thinking to inform my utility that they are now renting space in my home fort heir equipment, and sending them a quarterly bill. Estimated, of course.

  • JOE

    I am leaving eon after the holiday and will never ever go back to the thieving robbing barstewards

  • JOE

    THATS RIGHT FOLKS THERE IS NO LOYALTY FROM THESE BARSTEWARDS SO I SAY ITS TIME TO OPEN UP THE CHIMNEYS AGAIN AND START USING OUR FORESTS AND DEAD TREES FOR HEAT BRING IT ON FOLKS IT ONLY COSTS THE PRICE OF AN AXE

    • Michael Martin-Smith

      Indigenous shale gas can supply the UK for decades if not longer. We can be free of “International market” excuses for price rises. Fracking shale in the USA has cut carbon emissions by 50%- a far better achievement than all the EU regulations put together.
      There is NO case for Government Green or Carbon taxes, as the evidence that carbon emissions actually cause “global warming” with ice and snow is dubious in the extreme. Even if we stopped ALL fossil fuel use, the UK’s contribution to reducing temperatures in 2100AD would be at best 0.02%- ie statistically non-existent.

      The infliction of poverty and misery to “Save the Planet” is a fraudulent prospectus, especially as the energy and raw materials available to a spacefaring civilisation are effectively limitless. We would be better aiming to REDUCE space transportation costs 50-100 fold; the UK actually has the best technology for this (Skylon), and can bring it to service in a decade for the cost of the Olympic Games.

      We should ignore the specious excuses of the Energy cartel, and see matters for what they are- a stitch up. It simply will not wash

      We are being taken for a ride- just like the non-aristocratic French people in the middle 1780’s!

  • PV 70

    Why is cost of electricity half price in Helsinki compared to London? Something just doesn’t add up!

  • maximus

    Thanks Eon. Just what i needed. A 24.3% hike in electricity costs. Your letter thoughtfully shows me that i was paying year average of £307 and now, with the unit increase and your FORCED INTRODUCTION!!!!!!! of a standing charge i will now be paying £380 year average for the same amount of energy. I have been with Eon for many years and now i know loyalty means nothing other than being a cash cow for you and your shareholders.

    No doubt some BIG BONUSES will be paid to you and the board for screwing your customers again. Angry. Yes i am bloody angry.
    i will certainly being looking to any and all ways of ‘green” electricity now in the hope one day to be free of money grasping corporations.

  • Mick Halifax

    What they don’t tell you as well is that you are now going to pay 27p per day(£99 per year) standing charge just for the privelige of having them supply you with their overpriced product.

  • Why are “network costs” 10% up on last year? Isn’t this kind of thing supposed to go DOWN in a recession?
    You don’t by any chance own the network as well do you?
    Cos if you did that would be a dirty con trick which would lead to people’s poverty and death from hypothermia.
    …….Oh hang on….
    You DO own the network don’t you?

  • Phil Roberts

    Why are Eon spending millions of pounds on Ironbridge power station converting it to biomass when it has to close by the end of 2015 ?. It could have just carried on burning coal until this date. The station has not run for nearly 12 moths yet the staff are still getting paid their £50,000 plus salaries. So Eon is doing very little to reduce it’s running costs in fact they are doing just the opposite. The station still has thousands if not millions of tonnes of coal just lying on the coal plant that has already been paid for by the consumer.
    Maybe Mr Bird would like to comment on this ?

  • Another foreign company ripping us off, this is getting beyond a joke and what does the government do insulate our lofts which does nothing to reduce power bills.

  • Annoyed Holmfirth

    I dont know how they got to be number 1 they are a set of money grabbing sharks that try robbing elderly people like my dad of his pension by putting up his direct debit every 2 minutes even thought they have £118 of his money in their account

  • JW

    No, David Bird, We do not believe you.

    Price rises based on false information and propaganda, seem to be a feature of the greed of the energy companies – and as their customers leave them, they increase their profits by raising prices. We need to wear outdoor coats indoors to stop the leakage of our money.

    The Government’s GREEN DEAL is a farce to impose greater debt on consumers. How dare they say that it is to HELP people. It is a shift to put the costs of improvement onto the working population.The Government’s energy policy is in tatters now the consumers realise what is happening. Foreign owned energy suppliers get the profit. The expensive development of nuclear power (producing more expensive electricity even discounting the decommissioning and storage fees which will need to be paid for hundreds of years), is dangerous.

    The cash for the already ordered nuclear power stations will grow exponentially, as it usually does with Government contracts, and needs to be redirected to wind and solar production. The nuclear power program needs to be cancelled (the lies about it being necessary for our future needs), are propaganda from recipients of the taxpayers cash during the setting-up of contracts. Where are the figures which support this propaganda?

    We need to starve the power companies of their ill-gotten income and tax their massive profits and cut the huge salaries paid to the Directors. We are learning to ignore the false propaganda from the power companies. I aim to heat only one room in my house, wear more clothes and have turned off my central heating. Take that, power provider, I will give you no more and will shop around to get a better deal more frequently..

  • Marv

    E-On is a totally greedy company who do not give a crap about there customers. The standing charge they charge is a rip of for a start. I joined a company were there no standing charge thats a saving of £96 per year. All I can say to people is move to another company there out there. I compare E-on to NPower at the bottom of the chain for value for your money. Move on!!!

  • bluecactus

    I have never been a customer of E-On, until I magically became one today due to the forced introduction of a standing charge for a blanked-off gas meter that I do not use, and haven’t used in the 7 and a half years I have lived at this address.

    I refuse to pay the £14.62 bill I have received today. You seem to be looking for ways of extracting money from people who aren’t even using your services or products.

    Absolutely shameful.

  • Rainman

    Just look at his face , the smug little git !

  • Anthony Gunby

    Yes your right they are greedy robbing fat cats. I am with eon only because they took over Powergen who I was currently with. All I have is gas from with eon as I only have a gas cooker. After checking my bill for this month I have noticed I am now being charged a standing charge.
    My tariff is well was a none standing charge tariff because I used so little gas, my average yearly bill was no more than £10. Now after 15 years what I payed in one year as almost doubled in one month. I was never informed that I would lose my non standing charge tariff. Also you can no longer pay a fixed ammout upront anymore online. Its the exact payment only. I will be having words. Not that it will do any good.

  • Non Eon Customer

    I’m not an eon customer, but they still send me bills. Maybe you should spend some of your “fair profit” on educating your staff and getting your facts right. £309 and you don’t supply me – idiots!

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