E.ON follows rivals and hikes energy bills

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E.ON, Britain's third largest energy provider, yesterday became the latest company to announce significant increases in its bills. E.ON said it would put up prices for gas by 15 per cent and electricity by 9.7 per cent, with immediate effect.

The price hike will add an extra £86 to the average dual fuel customer's annual household bill, taking it from £913 to £999.

The increase follows similar moves from four of the "big six" energy providers in recent weeks. British Gas, EDF Energy, Npower and Scottish Gas have all raised prices already this year. Only Scottish and Southern Energy has maintained its 2007 tariffs – though this is set to change in April.

Jenny Saunders, the chief executive of National Energy Action, warned the recent spate of price rises will have a profoundly damaging effect. "Roughly half a million homes will be struggling to stay warm," she said "Fuel poverty brings anxiety, depression and physical ill health to many of the householders affected by it."

E.ON said it had no choice but to raise prices after a 60 per cent increase in the cost of wholesale gas over the past 12 months. It blamed the rises on "sustained pressures from the market".

Graham Bartlett, E.ON's managing director, said the company was doing itsbest to protect vulnerable customers. He said price rises would be deferred until April for the company's 670,000 least well-off customers.

In addition, Mr Bartlett said 550,000 customers had already signed up to E.ON's Price Protection scheme, under which households fix the cost of their supplies for an extended period. They will be unaffected by yesterday's announcement until at least October 2009.

Nevertheless, Ann Robinson, director of consumer policy at the price comparison service uSwitch.com,criticised the increases. "E.ON has followed the rest of the market with an inflation-busting price hike," she warned. "[It] has made significant strides in improving customer service and this announcement may cast a shadow over these efforts."

The Fuel Poverty Advisory Group said it had appealed to the Government to use more practical means to meet its pledge to bring vulnerable households in England out of fuel poverty by 2010. "The Energy Bill does absolutely nothing for the fuel poor," said the chairman, Peter Lehmann. "It should... include provisions to ensure better prices for low-income customers, especially by tackling the huge price differentials between customers paying by different methods."