In a move that was scarcely unexpected, E.ON's UK retail supply arm Powergen has moved to raise residential gas and electricity tariffs by 24% and 18% respectively.
As a direct result of rising wholesale costs, Powergen has become the sixth major energy supplier in 2006 to raise prices for its residential customers.
Electricity and gas prices will rise by 18.4% and 24.4% respectively for the majority of Powergen’s residential customers, E.ON UK said in a statement.
In order to ensure customers avoid any future price increases until 2010, Powergen says it has launched a capped-price product that offers the longest protection period on the market and has no tie-ins or cancellation fees.
We know that what matters to our customers is the impact this increase will have on their pockets but we, like all energy suppliers, continue to face unprecedented pressures from wholesale costs, said Nick Horler, managing director of Powergen Retail.
We shielded our customers from the impact of these costs for as long as possible, and we continue to ensure that our prices are highly competitive.
I can assure all of our customers that we take our responsibilities as one of the UK’s leading energy suppliers very seriously, which is why we’ve also made extensive support available, Mr Horler added.
Those investments, via Powergen’s parent company E.ON, could see GBP3 billion invested over the next three years in gas-fired power stations, onshore and offshore wind farms, biomass power stations, vital gas storage facilities and new substations and cabling in central England, the firm said.
In addition, E.ON says it is planning to spend more than GBP2 billion on projects designed to help get gas to northern Europe and on to the UK.