Eon pre-empts price cap with new tariff

One year “cap and track” will review energy prices quarterly

Big six energy supplier Eon has launched a new one year fixed term tariff. The firm says the new model will guarantee customers benefit from dips in the average price of energy while protecting them from price spikes.

The new “Cap and Track” dual fuel product comes as government considers how it will implement price regulation in the energy retail market in order to protect consumers from what it has described as “abusive” billing.

Before the recent general election, the Conservatives promised their cap would save the average household £100 per year.

Customers who sign up to Eon’s new deal the deal now, will benefit from energy prices £100 below the market average, the company claims.

The tariff works by monitoring the price of rival energy deals via the independent Energylinx Retail Price Index.

The initial price offered to new customers signing up is revised daily as the market changes.

Once a customer is on board, their prices are reviewed quarterly. If the average market price at the point of this review has fallen below the customer’s start price, their price will be lowered accordingly.

In the event that the average market price at their quarterly review is higher, then the customer’s price is guaranteed not to rise above the price they originally signed up to.

Chris Lovatt, Director of Residential Operations at Eon said the new product will give customers “peace of mind”

He added: “By capping the price for the duration of the 12 month tariff, we guarantee the price the customer pays will not rise above their start price. For many this takes away the hassle of shopping around for energy, especially for those who don’t feel they have the time to do so.”

Lovatt said the launch should also help address energy market problems linked to the high proportion of disengaged customers on standard variable tariffs.

The Cap and Track does not carry an exit fee for customers.