Npower raises prices by £136 a year as it blames Government underestimate on Green costs for spiralling bills

Npower today became the latest energy giant hike bills, imposing a painful 10 per cent rise in time for winter while accusing the Government of getting its sums wrong on the cost of delivering green measures.
Npower prices will rise on December 1, in time for the coldest weather when usage is highest, and the average increase for dual fuel customers is 10.4 per cent - an extra £136 a year taking the average bill to £1,459. Those who pay by direct debit will see prices rise 11 per cent.
Those averages hide even bigger increases for customers in certain regions as npower is removing historical regional differences in its pricing. Those in the old Eastern and EMEB electricity board regions who pay by direct debit will pay 11.5 per cent more. Scottish Hydro region direct debit customers pay a below average rise of 10.3 per cent

Rough trade: npower will make £250 more each customer in the coming year compared to two years ago - with much of the rise blamed on hitting green targets for measures such as wall insulation

Npower is the third of the 'Big 6' suppliers to raise prices following Scottish and Southern Energy two weeks ago and British Gas last week. All the rises so far have been around 10 per cent - almost four times the rate of inflation - and all the suppliers blamed higher-than-expected costs from delivering Government measures on energy efficiency for pushing customer bills higher.
At the same time, the suppliers stressed that they make only slim profits from domestic customers. Npower said it would make around 5 per cent form households after the rise takes hold.

Paul Massara, chief executive of RWE npower, said: '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.'
Npower said that a Government's £1.3billion estimate for the cost of the Green Deal and Energy Companies Obligation was wrong. It said the total bill for the schemes - which provide loans to customers or subsidies to carry out energy efficiency improvements in their homes - would be more like £1.9billion and that this extra cost needed to be passed to customers.
The company also took a swipe at the price cap promised by Labour leader Ed Miliband. Mr Massara said 'Only 16 per cent of the bill is under our control and imposing price controls discourages investment, increases uncertainty and ultimately leads to higher prices.'
'We understand that although the Labour Party’s proposed price freeze may appear superficially attractive it will not lead to lower sustainable prices going forward because it doesn’t cut the growing costs of supplying energy.'

Break down: How npower says your bill is made up.

The arguments put forward by npower will not ease the pain on households. The supplier raised prices by 8.9 per cent at the same point a year ago. It means the average npower dual fuel customer will pay almost £250 more in the coming year than in 2011. Npower will collect roughly £750million more from its customers than two years ago.
Mark Todd, director of price comparison service Energyhelpline, said: 'Halloween has come early for npower customers. npower has pulled two of its best value fixes, showing that customers really need to act now if they want to switch to a low cost fixed tariff to beat the price rises. Politicians are not going to save you from a chilly winter, only you can by switching smartly.'

 

'This is devastating news and is proof to cash-strapped consumers that customer loyalty reaps no benefits. The truth is that there is nowhere to hide from the energy hikes and more suppliers are set to follow suit.'
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: 'The fear is that even more (homes) 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.