Npower to increase energy prices by more than 10% in another blow to consumers
Simon Read is Personal Finance Editor at The Independent. He edits the Saturday Your Money section and writes the Daily Money column and Wednesday’s Midweek Money section in i newspaper. He also writes for the news and business pages of the Independent and i newspaper and is a regular money commentator on TV station London Live. He has won numerous awards including Consumer Finance Journalist of the Year.
Monday 21 October 2013
Npower this morning became the third of the Big Six energy giants to hike the cost of bills - but by considerably more than their rivals.
The company is raising gas prices by 11.1 per cent and electricity by 9.3 per cent to give some 3.1 million customers a December shock when their bills arrive.
On Thursday British Gas announced a 9.2 per cent increase, while the previous week SSE said it will raise prices by 8.2 per cent in November.
This morning’s announcement means that in total more than 17 million households will now see their energy bills rise between November and December, and three more of the energy giants – EDF, E.on and Scottish Power - have yet to announce increases.
Jeremy Cryer, energy spokesperson at Gocompare, said: “The floodgates have been well and truly opened, and with Npower’s price rise now confirmed, we’re half way towards a full-house of price rises from the big six energy providers.”
Ann Robinson, Director of Consumer Policy at uSwitch, said: "With three of the big six energy suppliers hiking their prices, consumers will be going into winter with heavy hearts and lighter wallets. The fear is that even more will feel forced to turn down and switch off in an attempt to keep their energy bills under control. This type of sacrifice is unpalatable at the best of times, but intolerable if we experience a real winter freeze.
“As energy becomes less and less affordable, the more we will see people rationing and going cold. The knock-on cost in misery and the potential impact on health and well-being could be immense. Consumers are paying a steep price for the fact that successive governments have failed to put affordability at the heart of energy policy.”
Last week, the energy giants came under criticism after independent supplier Co-operative Energy said it was take on half the extra costs itself, presenting customers with a 4.5 per cent rise in January.
The mutual’s boss Ramsay Dunning, told The Independent: “The profitability level we require is less than, for instance, British Gas’s 5 per cent.”
Today Paul Massara, chief executive at RWE npower, defended the firm against accusations that it is profiteering: “We only aim to make around 5 pence in every pound in our retail business which we feel is a fair return for delivering reliable energy to consumers and for the risks that we bear.”
He said the company is doing what it can to reduce external influences on energy bills. “I know that any increases to household bills are always unwelcome, and this is not a decision that we have taken lightly,” he added.
But MP John Robertson, who sits on the Energy select committee said: “The CEO has come out all guns blazing, saying they only make 5 per cent profit. But he is trying to pull the wool over our eyes and make us forget about the shady shuffling of money around the company. Profits went up by 25 per centlast year and it is clear Npower is simply taking advantage of customers and ripping them off.”
“It’s another week, another price rise – we have three more inevitable price rises to go. The energy barons are being left to run riot and need breaking up as a matter of urgency. Ofgem and the Government need to get a grip on this, so people do not have to choose between heating and eating this winter.”
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