Eon announces £55 SVT price rise

Eon has announced it is increasing its standard variable tariff (SVT) electricity and gas prices, due in part to “the significant rise in the cost of wholesale energy”.

The change will come into effect on 16 August, when the unit price of the Eon EnergyPlan (Eon’s SVT), will increase by an average of 4.8 per cent (£55) for dual fuel customers, 6.2 per cent (or £36)  for electricity only customers and 3.3 per cent (£19) for gas only customers.

Announcing the change, Eon said it has contacted around 1.8 million SVT customers to advise them cheaper tariffs could be available, and over the last 18 months the number of SVT accounts held by Eon has fallen by around 21 per cent.

It also said over 2 million customers on existing fixed tariffs and those covered by the prepayment and safeguard cap will be unaffected.

Last week First Utility announced it is raising its prices by an average of 5.9 per cent for dual fuel customers on its standard variable tariff, starting on 23 July, and a few days earlier, renewable energy provider Bulb announced plans to raise prices by an average of 5.1 per cent.

Michael Lewis, chief executive of Eon UK, said he had hoped to mitigate against such a move by making structural changes earlier in the year, but cost increases in relation to the regulated prepayment cap in April, as well as what he described as “a hike” in the price Eon has to pay for energy, thanks to factors including the Beast from the East and other such extreme weather conditions, have means “advanced purchases had been able to shield our customers from some, but not all, of this impact.”

Looking forward he pledged the company will continue to “proactively” tell customers about the different tariffs on offer and encourage them to move to those tariffs, as well as promoting the different services that can potentially help bring their bills down such as a smart meter, a more efficient boiler or better insulation.

This is the second unit price increase Eon will have made in over four and a half years, during which time it has also cut prices on two occasions.

It said since it last increased its standard unit prices in April 2017, wholesale energy costs have increased significantly, with increases of 22 per cent seen since March 2018.

As well as cold weather that has depleted European gas storage, Eon also indicated that middle eastern politics have caused prices to increase dramatically. It also added that policy costs, such as the Renewables Obligation (RO), Electricity Market Reform (EMR) and Feed in Tariffs (FITs) have also increased during this time.