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E.ON price rise edges closer

According to The Sun, debt ridden E.ON are about to announce an 11% price rise for gas and electricity. Don't wait for them to do it, find a better tariff now.

According to an exclusive report by The Sun, E.On are planning to announce an increase of 11% on the 10th December taking effect in early January. There's no official announcement yet, indeed according to The Sun's report E.ON insisted "no final decision had been taken”.

Whether this leak is an attempt to prepare the ground or soften the impact of a slightly smaller increase is open to debate but those considering a variable rate tariff from E.ON should probably factor the increase when comparing prices.

At least E.ON can argue that they are not profiteering, having lowered it's 2013 profit forecast on Tuesday. E.On said that the "previous 2013 forecast no longer seems achievable”. Their share value has seen a 14% drop this week

Most of E.ON's problems seem to stem from it's home market in Germany and Europe. They have been hit by lower electricity prices as supply from renewable sources of wind and solar power come on line and demand has fallen. This has made their gas-fired power stations "barely profitable to operate”.

They have also been hit by the decision by Angela Merkel to close down Germany's nuclear power plants after the Fukushima disaster. With the sale of Horizon Nuclear Power to Hitachi announced on the 30th October, E.ON may be withdrawing from nuclear power or possibly they just needed the £348m to reduce their staggering Euro 31.5bn debt.

Chief Executive Officer Johannes Teyssen said: "We face huge challenges, particularly in our generation business. We're further optimising our conventional generation portfolio and also exploring whether to close some assets.”

Don't forget, E.ON's problems don't have to be yours and there's no need for you to subsidise someone else's energy! A quick check on the MoneyMaxim energy comparison service will show you the best deal available (don't forget to factor in an increase for E.ON). Allowing for the increase, E.ON's current fixed tariffs now look more promising than the variable rate, but these can be withdrawn at any time.

First:Utility and Spark have not yet announced increases, though First:Utility's iSave v12 does have a 3 month price fix guarantee and no termination fee after that. Switch energy supplier in November through MoneyMaxim and receive £20 cashback, terms and conditions here.