E.on and their notice of a 10,000% p.a. price increase. Is this a record?

Biscuit_Tin

I nearly fell off my chair when I got this notification this morning!

It's nothing to do with direct debits, or an increase in our consumption; it's the notification of an intended price increase of our electricity tariff from E.on.
Some mistake surely you would think? Well we did, so I called them only to be informed it's actually correct!

We own a small, secluded holiday home on the East Coast.
Before anyone thinks of burning down our holiday home, saying it should be for the locals to inhabit, well it is a genuine holiday home; planning permission prevents it from being used as a permanent residence for anyone.

Its our little escape from the hustle and bustle of routine life. It's small and basic. It's quiet & secluded and we even produce some of our own electricity using a small wind generator we have been donated over the years. Water is heated using some solar panels we also acquired over the years.

There is none of the usual, energy hungry luxuries most of us rely now on. No washing machine, no fridge, not even a television. We do sometimes take a portable radio, but that is powered by it's own batteries.

We do most of our cooking on the outside BBQ, but there is a small gas (bottled) powered stove should we suffer really bad weather.
The only electricity we really use is for lighting (but then it's not much because, as well as our wind generator, we often use citronella candles to keep the flying bugs away from us when we enjoy the garden even quite late during the balmy summer evenings), a smoke detector and unfortunately an alarm system we felt compelled to install about 3 years ago after some toe-rags decided to start breaking in. There's also an electric kettle, but we are not great lovers of a brew, but the neighbours who often pop round when we are there do seem to like them.

Last year, we used just 4kWh of mains electricity (and I think the previous year it was 5kWh)
This cost us the princely sum of about £1 and this is what our last electricity bill stated our anticipated electricity bill would be for the next 12 months.

Now when I work out the cost based on the latest price increase, it now comes to something like £101 p.a.. (due to the introduction of a £100 minimum annual charge, or daily standing charge they call it)

If my maths are correct, that is a 10,000% price increase.

Sounds like after 10 years of being a loyal E.on customer (and the property has, as far as we know, been supplied continuously by E.on before that, right back to the days of Eastern Electricity), we will be switching to a different supplier very, very soon.

According to the comparison sites, it looks like nPower will even pay us £40-£50 a year if we were to sign up to them with our consumption level.

Bye bye E.On.

Cardew

after 10 years of being a loyal E.on customer

They must have made a mint out of your loyal custom!

Whilst not as extreme a case as yours, I have an annex that is little used and a daily standing charge(dsc) for both gas and electricity would also represent a huge jump in annual energy costs. The same will apply to many people with holiday homes.

I am with Ebico who charge just a single rate(i.e. no tier system) and no dsc. Before that the dual fuel discount of xPence a day I got on the annex, was more that the total charge for some quarters.

Whilst I understand your point, it is obvious that E-on(and probably Ebico) are running our accounts at a loss; and we haven't really got grounds for complaint.

JC_Derby

is this extra £100 down to standing charges that eon will be charging from next year.

chris1973

Last year, we used just 4kWh of mains electricity (and I think the previous year it was 5kWh)

With an annual usage like that (which represents about 12 hours worth of consumption for most residential households) I would examine the whole point of keeping a physical connection to the grid at all.

Either you are rarely in the property or your alternative means is more than enough to service the requirements when you are there.

I saw a 3.2kw Generator for £40 the other day from a car boot sale, a fraction of what your standing charge / minimum annual charge will be, and more than capable of providing those 4 - 5kw/h of annual electricity which you need.

You can even get some really powerful but warm colour temperature LED based lamps, which you could run from some 12v batteries charged by a few solar panels, these will run for weeks on a Diesel Car Battery or larger leisure battery. You can even buy them as self contained lanterns, if you don't want the expense of more panels and batteries.

Even a few 12v LED based MR16 style spotlights will run for days off a car battery as their consumption is around 3w.

Personally if I ever had such a golden opportunity to tell an energy company where to stick their supply, i'd do it with a song in my heart and a spring in my step.

wakeupalarm

I don't see what the problem is with standing charges. I make hardly any telephone calls on my landline but I understand that I still have to pay BT a line rental for use of the line.

It doesn't matter how much electricity you use you are still using the cables to carry that electricity any time you want and therefore should share in the costs of maintenance of those cables. So the standing charges seem fair.

pooch

JC_Derby wrote: »

is this extra £100 down to standing charges that eon will be charging from next year.

I think so. It seems all Eon tariffs will have a minimum £100 p.a. daily standing charge.

I'm not sure if the OP qould qualify for a possible £20 discount assuming they have no gas mains supply to the property. It seems this is available depending on the supply region.

pooch

wakeupalarm wrote: »

I don't see what the problem is with standing charges. I make hardly any telephone calls on my landline but I understand that I still have to pay BT a line rental for use of the line.

It doesn't matter how much electricity you use you are still using the cables to carry that electricity any time you want and therefore should share in the costs of maintenance of those cables. So the standing charges seem fair.

When I buy petrol, I don't pay a standing charge to keep the pump maintained. A proportion of the revenue raised by each litre dispensed goes towards that maintenance.

Those who use the pump more (by dispensing more) pay more.

Same goes for almost all industries. Daily standing charges I hoped were a thing of the past when there was a nationalised monopoly.

Even in regards to the telephone today, at least they throw in a load of free calls. Mobiles, you get calls, texts, even internet access sometimes. You get nothing 'thrown in' with e.on. This is just an extra, additional charge they have decided to impose on their customers.

Surely paying for what you use is the fairest way forward. Even the government are thinking of possibly doing that for the roods - those who use them more may soon have to pay more for their upkeep.

chris1973

Daily standing charges I hoped were a thing of the past when there was a nationalised monopoly.

Spare a thought for Pre-Payment customers, not only do they pay the same standing charge as credit meter customers but their rates track the standard rate of energy and so do not enjoy the same discounts. So not only are they paying for the Electricity Network, but also for the Paypoint payment network as well.

In any other industry you'd expect a discount for paying cash in advance for their goods or service, but in the warped world of energy you pay more.

tripled

chris1973 wrote: »

In any other industry you'd expect a discount for paying cash in advance for their goods or service, but in the warped world of energy you pay more.

British Gas used to offer a discount for paying anually in advance, but it was discontinued, presumably because of poor take-up. Prepayment tariffs don't get a discount as the infrastructure to support them is more expensive so the margin is low, plus prepayment customers are often in rented properties where the opportunities for cross selling other service are limited so no incentive for an energy company to subsidise them.

pooch wrote: »

When I buy petrol, I don't pay a standing charge to keep the pump maintained. A proportion of the revenue raised by each litre dispensed goes towards that maintenance.

You don't get your own personal petrol pump. You do get your own meter and supply, which is drawn off a shared infrastructure.

spiro

Suppliers used to offer 2 tier tariffs where you paid more for the first x units and less for the units above. OFGEM decided this was too complex so they want them to go back to a single rate with a daily charge. This means very low users loose out.

Andy_WSM

spiro wrote: »

Suppliers used to offer 2 tier tariffs where you paid more for the first x units and less for the units above. OFGEM decided this was too complex so they want them to go back to a single rate with a daily charge. This means very low users loose out.

You've got to love OFGEM for meddling. I'm another that loses over £100 a year on the electric and a further £100 a year for a gas supply that is seldom used.