High electricity and natural gas prices continue to fuel public debate in 2007. Energy utilities, particularly in Germany but also in Sweden and other countries, were at times met with strong criticism. Residential and business customers increasingly expect their supplier to offer them clear and easy-to-understand prices and rate plans.
E.ON has seized the initiative and taken a variety of measures to respond to public criticism by:
On balance, customer choice in Germany has benefited E.ON. Through early December 2007, our regional electric and gas utilities had lost about 400,000 residential customers. However, our nationwide energy retailer, E WIE EINFACH ("E as in Easy"), acquired 700,000 new customers over the same period, for a net gain of 300,000 residential customers.
Energy price trends were anything but popular in 2007. In our communications, we stuck to the facts and were as open as possible. Rising fuel costs constituted the biggest single factor in the price increases of recent years and led to higher wholesale electricity prices across Europe. A recent study by A.T. Kearney, a consulting firm, shows that taxes and other government surcharges are the main cause of higher electricity prices in Germany. If you factor out taxes, German electricity prices have actually remained relatively constant since the liberalization of the electricity industry in 1998.
E.ON was Germany’s first energy supplier to publish a cost breakdown for its natural gas prices in the residential segment, enabling about 1.1 million households to understand the cost components of their gas service. The breakdown shows that higher fuel costs are the main factor in price increases.
In August 2007, E.ON UK launched the "Fixed Price Until 2009" product. The product caps prices through January 1, 2009 for electricity and gas customers. A price protection product has also been placed on the market which covers any increases in the price of electricity and gas.
