Npower signals energy price rise - Gas and electricity - News - Moneyfacts

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Npower signals energy price rise

Npower signals energy price rise

Category: Gas and electricity

Updated: 17/08/2011
First Published: 17/08/2011

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Npower has become the latest of the UK 's major gas and electricity suppliers to announce that it will be increasing prices for its domestic customers.

Five of the UK 's 'Big Six' suppliers – which supply the overwhelming majority of gas and electricity to UK homes – have hiked their prices recently, with just EDF having not done so.

From 1 October, gas prices from Npower will increase by 15.7%, with electricity prices rising by 7.2%.

The company said that energy customers on dual fuel deals could expect to see their bills jump by 12.2%.

As with other energy companies, Npower blamed the increase in prices on rising wholesale costs.

"I know it hurts everyone when we put up prices and I wish we didn't have to," said Kevin Miles of Npower.

"Although our half year profits were better than last year they do not begin to match the billions we are investing in energy for the future.

"With reduced quantities of North Sea gas, we are now forced to buy energy on the volatile global wholesale market. World events have pushed up prices and we believe this trend will continue.

"In the UK we have also seen rising distribution and network charges and further environmental costs but we have still managed to keep our increases lower than those announced by any other major supplier."

But consumer champion Which? has criticised the increases, especially against the backdrop of better than anticipated profits at Npower's parent company RWE.

"This price hike will make consumers yet again question what's happening in our energy market, especially as Npower's parent company has just announced a 130% increase in profits for the first half of 2011," Richard Lloyd, executive director of Which? said.

"Given such healthy results, people are bound to wonder why their domestic bills have to go up this much."

In December 2010 Npower announced hikes of 5% for both gas and electricity. The rises this month dwarf the last set of Npower price rises.

This latest increase is likely to pile even more pressure on consumers, making it more difficult for them to save money on energy bills in the increasingly difficult climate.

"The Bank of England has predicted that rising utility bills will drive inflation to 5% by the end of the year, which will put more pressure on already squeezed households," added Mr Lloyd.

"It's critical that Npower and all suppliers do more to help customers cut their energy bills – whether that's by getting onto the cheapest tariff or making their homes more energy efficient."

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