Customers should switch to expensive tariffs: electricity provider Eon terminates contracts with long-standing customers

This article first appeared on RTL.

Customers should switch to expensive tariffs: electricity provider Eon terminates contracts with long-standing customers

This article first appeared on RTL.de

Customers who have taken out the "E.ON power pack" tariff with energy provider Eon are currently receiving mail. "All providers are currently confronted with a historically unique situation on the energy markets. As a result, we are constantly revising our tariffs and, in individual cases, unfortunately have to terminate contracts at the end of the term. We are therefore terminating your current E.On Power pack contract on... ", says the letter.

In the same letter, a new offer is made – at the current market conditions with very high prices.

But in this case do Eon customers have a choice at all? Because if you refuse to switch to a new tariff, Eon will automatically send you to the basic supply of the municipal utility after the end of the contract period. "Even if you do not sign a new contract by December 31, 2022, you will automatically be supplied with energy from March 1, 2023 as part of the statutory obligation to supply energy from your local basic supplier," writes Eon to a customer. The letter was published by the online portal "Consumer Help Electricity Provider".

When asked by RTL, the energy giant initially confirmed the cancellations: "In a few cases, it may be the case that we do not extend contracts that no longer correspond to the current market conditions, because we can no longer offer the relevant tariffs in the form, for example ."

However, the contracts run “until the agreed end of the term”. The market leader, which supplies around 14 million customers in Germany with electricity and gas, emphasizes: "Basically, these exceptional cases are about a contractual termination after the end of the mutually agreed contract period - that's a completely normal process. Such a step we don't make it easy for ourselves, but we are forced to do so by the unique market situation."

And how does Eon justify the cancellation of existing customers' contracts? "The procurement prices for energy on the markets are at a historically high level - sometimes with strong fluctuations. The wholesale price for electricity has multiplied compared to the previous year. The prices are currently developing very dynamically. We must also reflect this development in pricing and in energy contracts into account," explains Eon.

Since the term of the affected contracts is limited, termination at the end of the contract term is also legal. The fact that the terminations are taking place during a period in which prices are being massively increased and loyal existing customers are being forced to conclude very expensive new contracts has a negative connotation.

"I am very surprised that Eon is terminating contracts instead of raising prices. Matthias Moeschler from the "Consumer Help Electricity Provider" portal Eon's approach.

"Even if terminations at the end of the contract are legally permissible, this poses financial problems for customers. After all, new customer contracts for private consumption are currently significantly more expensive at around 40 to 45 cents," says Moeschler.

One thing is certain: Affected Eon customers must act by the end of the year if they do not want to fall into the expensive basic service. The price fluctuations of electricity and gas are currently enormous, so switching providers could be worthwhile.

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