E.ON announces cut in UK electricity prices

LONDON (SHARECAST) - German energy firm E.ONis to cut its standard electricity prices in the UK in a move which it says will trim 31 quid from the typical householder's annual bill. 

The 6% price cut for its 3.7m UK customers will not come into effect until February 27th, however, and the group has not instigated any sort of price cut for its gas supplies. 

All but one of the so-called big six energy suppliers in the UK have now announced cuts in their electricity prices, in response to falling prices on the wholesale market; Scottish Power, owned by Spanish utility company Iberdrola, remains the odd one out, as it has yet to announce price cuts this year. 

The good news for E.ON customers tied in to fixed energy tariffs is that the company will allow customers to switch to a cheaper option without any penalty. 

The site editor of price comparison web site,Moneysupermarket.com, Clare Francis, warned E.ON customers, however, that "the fixed deals they are already on may still be the best option." 

"Those struggling with the cost of their energy bills should take action to find a better value deal and pay less for their energy. Making the switch to a better priced product can lead to average savings of £228. The cheapest product on the market is currently iSave v9 from First:Utility with average bills of £1,030 per year," Francis said. 

The 6% cut announced by E.ON tops the 5% cut announced last week by Centrica-owned British Gas and Scottish Gas. On average, that price cut was set to save 5.3m customers on a single rate, variable tariff £24 per year, on average. 

Moneysuppermarket's Clare Francis makes the point that, despite the price cuts announced this year, we are a long way off moving back to the sort of prices enjoyed - if that's the word - in 2010. 

"After the average increases of 17.4% to gas and 10.08% to electricity we saw last year, many people will be hoping for further cuts to come. This round of reductions has so far seen the cost of gas fall by an average 4.8% and the cost of electricity fall by 5.5% meaning an average of £34 cut from the cost of standard bills - not enough to offset last year's price hikes," Francis said. 
Source:http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=17640204