Npower Announces Latest Price Increases

By Anne Lewis-Schneider

Npower are the third of the Big Six Energy Companies to announce price increases in the last two weeks. After the SSE and British Gas increases, comes yet another that is higher than both of the previous companies. Npower have made known that gas prices will go up by 11.1% and electricity by 9.3% adding £137 to the combined fuel costs a year. The increases so far have had a stormy reception from the public who will be hard pressed to pay the increased prices, which amount to a threefold inflation rate which surely cannot be accepted as fair.

The latest increases will affect 3.1 million customers who currently receive their gas and electricity from Npower, who have said that the increases are unavoidable due to the increase of raw material costs as well as covering government initiated subsidies which have to be collected via the billing of customers on their monthly fuel accounts. Npower also said that the increase was in part due to the cost of delivering energy to homes and the risks associated therewith had to be taken into account.

The main theme harped on by the three major energy companies that have increased their prices so far seems to be that the decisions have not been taken lightly and that they only want a fair return for the service that they provide. Increases in fuel and electricity are an area that has a high impact on the fixed income sector that fall into the lower income bracket. It is in these households that difficult decisions have to be made as to whether the family gets adequate food or adequate heating, as with the steep increases it is often a hard fought battle to try to do both.

Npower’s chief executive Paul Massara has given the by now standard rumble of knowing increases are unwelcome but doing it anyway. He has said that the company only aim to make a 5% profit in their retail billings which have once again been touted as fair in accordance with their reliable delivery of services to their customers, and any risks that they have to cover. He also stated that Ed Miliband’s price freeze would actually lead to higher prices in the long run because it would lower sustainability due to the increasing costs of supplying energy in a more efficient low carbon energy market into the future.