MSE News: E.on to hike energy prices by 3.7%

klaatu

I've had a letter from E.On this morning, telling me that they're closing my existing tariff and moving me to "EnergyPlan". They are doing this to create "a simpler and clearer, fairer and more competitive energy market".

The combination of that and the price increase means that my costs (Electricity only) will be going up by 13%. So the "simpler and clearer, fairer and more competitive energy market" is costing me an increase of over 9%.

As I use a lot of electricity, this is a significant amount. Time to see if switching makes sense, I guess.

Steve

Former_E.ON_Company_Representative:_Malc

Smithy74 wrote: »

Some 3 weeks ago I entered into a 2 year fixed rate contract with e:on, today I receive a letter informing me that my tariff no longer exists and therefore they have moved me onto a more expensive tariff. The other, 'simplified', options were all more expensive so am I to understand that I have to take this lying down? How is it fair that I have entered into a binding contract ( had I cancelled I would have incurred a £20 penalty ) which means nothing and that the provider can move the goal posts at any stage without penalty?

I'm furious!

Any advice would be gratfully received. Many thanks in advance.

Hi Smithy74

If you changed to a fixed deal 3 weeks ago, you'll be ok. The contract will be honoured right up until the end date.

There will, though, be changes in the way rewards/discounts are paid. Instead of percentage discounts given at the end of a bill, the unit rates and standing charges will reduced by the equivalent amount.

As above, the loyalty reward will go but we'll pay what we owe for the rest of the contract in one go.

Hope this helps.

Malc

Nada666

E.ON_Company_Representative:_Malc wrote: »

There will, though, be changes in the way rewards/discounts are paid. Instead of percentage discounts given at the end of a bill, the unit rates and standing charges will reduced by the equivalent amount.

According to Bark01 according to Ofgem you are not permitted to do this - you can only reduce the standing charge or you can only reduce the unit rate but you may not cut both.

Former_E.ON_Company_Representative:_Malc

klaatu wrote: »

I've had a letter from E.On this morning, telling me that they're closing my existing tariff and moving me to "EnergyPlan". They are doing this to create "a simpler and clearer, fairer and more competitive energy market".

The combination of that and the price increase means that my costs (Electricity only) will be going up by 13%. So the "simpler and clearer, fairer and more competitive energy market" is costing me an increase of over 9%.

As I use a lot of electricity, this is a significant amount. Time to see if switching makes sense, I guess.

Steve

Hi Steve

I'm afraid, the letter you've received was printed before the Government announced changes in the social and environmental programmes.

These changes have, though, enabled us to keep the price increase lower than originally intended.

Unfortunately, the percentage price increase advised in the letters doesn't include these reductions. As a result, the actual increase will be lower than the one advised.

The changes will also depend on the tariff you're on at the moment. If it's a variable tariff, prices will change on 18 January 14. The unit rates/standing charge will change but any discounts/rewards you're currently receiving will continue although they'll be paid in a different way as per my posts above.

If you decide to switch supplier as a result of these changes, we'll keep you on your current tariff and prices until the switch. Provided, that is, your new supplier lets us know by 14 February 14 and the switch completes within 5 weeks of the loss notice being received.

Really sorry for the confusion in the letter Steve but hope this helps explain a little more.

Malc

Former_E.ON_Company_Representative:_Malc

Nada666 wrote: »

According to Bark01 according to Ofgem you are not permitted to do this - you can only reduce the standing charge or you can only reduce the unit rate but you may not cut both.

Hi Nada

Smithy74 was talking about a tariff they signed up to 3 weeks ago. As such, this isn't available anymore. We're ok to apply previously agreed reductions in terms of both lower unit and standing charges on this tariff.

Once the tariff ends, though, so will this method of passing on the reductions.

In future, as you say, payment adjustments will only be made against standing charges.

Malc

dlusman

klaatu wrote: »

I've had a letter from E.On this morning, telling me that they're closing my existing tariff and moving me to "EnergyPlan". They are doing this to create "a simpler and clearer, fairer and more competitive energy market".

The combination of that and the price increase means that my costs (Electricity only) will be going up by 13%. So the "simpler and clearer, fairer and more competitive energy market" is costing me an increase of over 9%.

As I use a lot of electricity, this is a significant amount. Time to see if switching makes sense, I guess.

Steve

Same here . They are removing my existing tariff and moving me to a more expensive one , and then ALSO increasing the cost of this new tarif.. So they are hiding their "small" increase ( compared to other energy companies ) behind much larger increases for a significant number of their existing customers.

dlusman

E.ON_Company_Representative:_Malc wrote: »

Hi Steve

I'm afraid, the letter you've received was printed before the Government announced changes in the social and environmental programmes.

These changes have, though, enabled us to keep the price increase lower than originally intended.

Unfortunately, the percentage price increase advised in the letters doesn't include these reductions. As a result, the actual increase will be lower than the one advised.

The changes will also depend on the tariff you're on at the moment. If it's a variable tariff, prices will change on 18 January 14. The unit rates/standing charge will change but any discounts/rewards you're currently receiving will continue although they'll be paid in a different way as per my posts above.

If you decide to switch supplier as a result of these changes, we'll keep you on your current tariff and prices until the switch. Provided, that is, your new supplier lets us know by 14 February 14 and the switch completes within 5 weeks of the loss notice being received.

Really sorry for the confusion in the letter Steve but hope this helps explain a little more.

Malc

But you cannot deny that prices are increasing more than the headline "3.7%" for those in this same position ?

Bluebirdman_of_Alcathays

dlusman wrote: »

But you cannot deny that prices are increasing more than the headline "3.7%" for those in this same position ?

This is how an average works. They have to give some that reflects all users, and I bet they one they've given is accurate, watertight and signed off by their legal department.

Former_E.ON_Company_Representative:_Malc

Hi dlusman

The percentage increase depends on the particular tariff.

The headline rate is an average only based on our standard variable tariff. The actual amount will depend on the individual circumstances.

Malc

Possetjohn

E.ON_Company_Representative:_Malc wrote: »

Hi

Just to let you know, the rewards/discounts etc haven't all stopped. It's that they'll be paid in a different way.

Instead of percentage discounts, we're making deductions in £s.

For instance, on our new tariffs, the former 6 per cent Monthly Direct Debit discount will now be paid as a reduction of £35 per fuel per year. This will be taken off the standing charges.

There's also cash deductions for taking both fuels and having paperless billing.

We have, though, stopped the loyalty reward paid previously. However, customers currently receiving this as part of their existing tariff will be paid what we owe for the rest of the contract in one go.

Hope this is of interest.

Malc

I accept what you say but I looked at some of your tariffs the day before and the day after you announced the price rises. For me it increased by over £110 on a current £1500 annual spend. That is more like 7%+ than your headline rate. The changes from percentages to actual pounds, might be just about break even for average or below average users, but for higher users it is a steep increase. Combined with that the scrapping of loyalty rewards and substituting with loyalty points and the end result is not so attractive.

It was illustrated by the price comparison site results between the two days where you dropped from being close to the top (cheapest) to about half way down!