E.ON to cut prices for customers without gas

By Philip Waller

LONDON (Reuters) - Energy group E.ON on Thursday said its British arm was planning to cut bills for householders unable to cash in on the full benefits of competition, although its proposed cut fell short of a possible reduction highlighted by the UK energy regulator. E.ON said on Thursday it would reduce annual bills by 14 pounds for residential electricity customers in the East Midlands, eastern England and northwest England who did not have a mains gas supply.

The company said it was responding to an investigation by regulator Ofgem which showed electricity customers without gas were missing out on discounts offered to people taking electricity and gas from the same supplier.

The price cut proposed by E.ON was 41 pounds short of a potential saving of 55 pounds a year that Ofgem said was unavailable to 4.3 million British consumers not linked to the gas network because they were unable to get so-called "dual fuel" energy deals.

E.ON, which has about 5.5 million power and gas customers in the UK, claimed the Ofgem figure was out of date because it was from the regulator's analysis covering a period between 2005 and 2007.

"The figure was also a national average across all suppliers -- it was not a figure that related purely to E.ON customers," the company said in a statement sent to Reuters.

"We are confident that 14 pounds is the appropriate figure for E.ON's customers now."

Graham Bartlett, managing director of E.ON's retail business, said the company tried to make its pricing as fair and competitive as possible.

"We, like Ofgem, saw that our electricity customers who have no mains gas are simply not able to get some of our best deals," he said in a separate statement.