E.ON has announced it will be raising its gas and electricity prices by 8.7% in the New Year.
The new move will add £110 to the average household’s dual fuel bill from January 18, going up from £1,260 to £1,370 a year.
The average electricity price will rise by 7.7% and the average gas price by 9.4%. E.ON claims around 1 in 6 of all its customers who are on capped or fixed tariffs will not be “directly” affected by the changes.
The supplier said the price rise is due to higher costs in wholesale markets and network costs, which are the prices paid to other firms to use the wires and pipes to transport energy to homes. It claims the cost of increasing the amount of energy from renewable sources has also risen by more than 60% compared to last year.
The last of the ‘Big Six’ to hike prices in the winter, the supplier had promised to freeze its prices till the end of 2012. It is now writing to customers whose price will change, highlighting the individual impact on their bill.
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.
“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.”
E.ON claims it has helped customers better manage their energy use by installing around 200,000 smart meters in their homes in the last few years and more than 880,000 insulation measures since April 2008.
Last month, the supplier agreed to pay a total of £1.4 million to around 94,000 customers for incorrectly charging them.