Npower criticised over energy price increase

One of the UK’s largest energy companies, Npower, has just announced that it will be increasing its prices next month. The average energy bill will be 5.3% higher from 17th June, which will be a 4.4% increase for gas bills and 6.2% on electricity.

It’s believed the price hike will affect around a million customers, and on a typical dual energy bill on a standard tariff, bills are expected to go up by around £64 a year. This will mean a typical annual bill for Npower dual customers will reach £1,230. Customers who are on fixed deals, safeguard tariffs or prepayment meters won’t be affected by the changes.

This news follows that of several other UK energy providers increasing their prices this year. British Gas has just added an extra 5.5% to its 4.1 million customers’ bills, which has been branded as “unjustified” by the British government. Scottish Power are also increasing their energy prices by 5.5% in June, and EDF’s pricing are going up by 2.7% in the same month.

According to price comparison site Uswitch, Npower’s announcement has now made them the most expensive out of the UK’s “big six” energy providers. Claire Osborne, an energy expert from the site said: “The average £64 rise is the equivalent of almost three weeks spending on energy.”

“With the recent wholesale cost increases, now is the time to switch and lock in a fixed deal to protect yourself against future price rises. Energy suppliers haven’t been afraid to increase prices in spite of the threat of an energy price cap – perhaps because they’re confident that customers will mistakenly think a cap protects them, so they won’t switch once it’s in place.”

The move has been heavily criticised by the government, charities and price comparison companies. Stephen Murray, energy expert at MoneySuperMarket, said: “This is a chunky rise from Npower – all we need now is something from SSE and it’s a full house from the Big Six. Npower says 60% of its customers won’t be affected but that still means 40% – or one million people – will.”

Mark Todd, co-founder of switching service Energyhelpline, also commented, saying: “The most expensive standard tariff just got more expensive.” Gillian Guy, the chief executive at Citizens Advice, added: “At a time when many energy customers are struggling with their bills, this price rise will be hard to stomach for the approximately 1 million customers affected.”

However, Npower have defended the price hike, saying that due to factors like rising wholesale prices, they’re necessary to maintain services to consumers. Npower have also blamed recent government policy changes like the introduction of smart meters and the new emissions targets.

Managing director for domestic markets Simon Stacey said in a statement: “Announcing this price change today isn’t a decision we’ve taken lightly. The costs all large and medium energy suppliers are facing – particularly wholesale and policy costs which are largely outside our control – have unfortunately been on the rise for some time and we need to reflect these in our prices. Less than half of our customers are on our standard tariff – one of the lowest levels among the larger energy suppliers.  We continue to encourage all our customers to look at our range of competitive fixed deals and switch to a tariff that best suits their needs.”