E.ON has announced its dual fuel standard variable tariffs will increase by 8.8% from next month.
It will come into effect from April 26th, taking the energy bill up to £1,144 a year and affecting 2.5 million customers.
The Big Six supplier claims it is the first increase in standard variable prices in more than three years.
It says the price rise stems largely from an increase of around 36% in costs, “due mainly to the rise in non-energy parts of the bill such as social and environmental schemes, which support renewable energy and help customers use less energy”.
The energy company will be sending more than three million letters to customers this month with “personalised saving messages” and offering them a cheaper tariff.
It has also launched a new two-year fixed tariff, costing £1,047 a year for dual fuel customers.
Chief Executive Tony Cocker said: “This is the first time since January 2014 that we have increased our standard variable prices. It is an announcement we never want to make but is due in large part to the fact that many of the costs we don’t directly control, such as policies including EMR [Electricity Market Reform], RO [Renewables Obligation] and the Energy Company Obligation, which are paid for via people’s energy bills, are increasing.
“We have been able to partially offset some of these rises through our wholesale hedging policy and other means but we do have to make an increase.”
British Gas has said it would freeze its energy prices until August.