E.ON joins ‘Big Six’ energy rivals in cutting prices
E.ON today became the latest of the UK’s “Big Six” energy suppliers to cut prices as it announced a 6% fall in electricity bills – benefiting 3.7million customers, including many in East Anglia.
The move will come into force from Monday, February 27, shaving �31 off the average annual bill, but the group left gas prices unchanged.
E.ON also announced that customers still on fixed deals will able to switch to another tariff for free to allow them to take advantage of the offer.
It became the fifth of the big six suppliers to announce a cut in recent days after falls in wholesale prices, although none has yet cut both gas and electricity.
British Gas last week cut bills for more than five million customers by making an instant average cut of 5% in its standard electricity tariff.
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Southern Electric and Swalec owner SSE said it would cut the price of household gas by 4.5% from March 26, while French-owned rival EDF cut gas prices by 5% from February 7. Further price cuts are expected, with Scottish Power the only “Big Six” company yet to announce a reduction in either gas or electricity tariffs.
German-owned E.ON, which previously operated in the UK as Powergen, retains a relatively high concentration of customers in the East of England as it includes the retail business of former regional supplier Eastern Electricity as a result of its successive takeovers by Hanson, TXU and Powergen following privatisation.
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However, E.ON is no longer a major employer in the region, having pulled out of the former Eastern headquarters at Whersted Park, Ipswich, three years ago, subsequently selling the site to the East of England Co-operative Society.
E.ON UK chief executive Tony Cocker said: “We understand that household bills are the most pressing concern for families across the country.
“Whilst we’re pleased to pass on this recent slight fall in wholesale prices, most experts agree that global energy prices will continue their long-term rise.”
Although five of the big six have cut prices, the falls do not compensate for recent increases. All six put prices of gas and electricity up over the summer or autumn following increases last winter, blaming rising wholesale costs.
Suppliers have been accused of failing to cut prices as quickly as they put them up.
Adam Scorer, director of policy and public affairs at Consumer Focus, said: “With cuts from five of the big six, the spotlight is now on Scottish Power as the last of the major suppliers to act.
“It’s good to have seen such a quick series of price reductions. We hope this shows suppliers are waking up to the need for customers to see rapid cuts when wholesale prices are low and that this trend will continue if wholesale costs carry on falling.
“But customers will still be paying a lot more for their energy than they were a year ago and there will still be almost seven million households in fuel poverty.”
Dr Cocker said that passing on the fall in wholesale prices is part of the group’s efforts to win back the trust of consumers.
He added: “No stone is being left unturned as we look at the products we offer, how we support our customers and how we make clear what goes into a bill.”
E.ON’s changes will reduce the average dual fuel bill paid by direct debit by �30 to �1,160, while a dual fuel customer paying by quarterly cash or cheque will see their bill fall by �31 to �1,223.