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E.On announces it is likely to increase its prices

After releasing its financial performance for the first nine months of 2013 and noting an 17 per cent increase in its profits, E.On have announced it is ‘increasingly likely’ that it will put up its prices.

E.On is the only one of the big six energy companies in the UK that has not yet announced an increase in its tariffs.

E.ON UK chief executive, Tony Cocker said: “Our turnover has increased significantly compared to last year, and we have also seen a very small increase in what we have earned compared with the same period. It is also notable that we have been running our supply business at a loss of around £37mfor the last three months.

According to Mr Cocker, the costs E.On controls, such as running their contact centres, have fallen but the costs they do not control such as networks and government schemes have risen.

Mr Cocker said: “According to Ofgem’s recently released figures2 we have already delivered ahead of the industry towards our ECO targets and have done so as efficiently and as cost effectively as possible. However it is also clear that we are not just being asked to do more but also to complete more complex home improvements”

E.On said it is increasingly likely that it will have to pass on some of these increases in costs to their customers.

Mr Cocker attributed the financial results to increased costs through government policies such as the Carbon Price Floor.

He said it is: “simply a tax that artificially inflates the end price for consumers, provides revenue for the Exchequer and acts as a subsidy to operators of existing nuclear plants. We believe it should be scrapped.

“However, if it is not scrapped, the money it raises should be used for energy efficiency. This is why we support the Energy Bill Revolution, which is calling for the Carbon Price Floor revenues to be reinvested to improve the energy efficiency in UK homes.”

SSE has also announced a fall in its underlying profits for the six months to 30 September. SSE said it will lower its prices if the government cuts green levies.

Meanwhile Co-operative Energy has announced at the same time that it will reduce its prices on gas and electricity bills.

The average 4.5 per cent price increase, which Co-operative Energy announced on 18 October, has now been cut by 2 per cent to 2.5 per cent. 

Co-operative Energy group general manager Ramsay Dunning said: “As we stated in our recent price increase announcement, there were a number of factors that were out of our control including costs associated with buying energy and getting it into people’s homes, that we reluctantly had to pass on to our customers by raising prices.

“However, given the expectation that an announcement is imminent that the burden of green and social taxes will be removed by the Government we have decided to take a leap of faith and remove this element, which represents 2 per cent, from our previously announced average 4.5 per cent price increase. This reduces our proposed average increase to 2.5 per cent.

“If ultimately we have misread the signals and social taxes remain in place for next year we will have no alternative but to review this decision but at least our customers will have benefited over the difficult winter months.”

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