npower increases energy prices

npower has announced new energy prices for domestic customers, with an average increase of 12.7% for electricity and 17.2% for gas from 5 January.

npower has been forced to put up prices because the cost of buying energy on the wholesale markets has increased dramatically. Since mid February 2007, electricity wholesale costs for 2008 have increased by 66% and gas by 60%.

In addition, npower – along with all energy suppliers - is facing other significant cost pressures such as increased gas and electricity distribution and transmission costs. The spend to meet the Government’s energy efficiency targets (now called CERT has doubled and npower will be spending around £300million on energy efficiency measures for customers over the next three years.

Today’s change in prices will mean the average annual price increase will be £64 for electricity and £95 for gas, across all payment methods.

Customers paying by pre-payment meters (PPMs) will see lower average price increases of 9.8% for electricity and 15.7% for gas. This is partly due to the work npower has been undertaking to upgrade PPMs - resulting in a reduction of the extra costs associated with serving these customers.

npower is committed to helping the Government tackle fuel poverty and today’s price increase will not be applied to customers on npower’s First Step ‘social tariff’. This year, npower is also providing an extra £4million for its 50,000 most vulnerable customers - who will each receive a rebate of between £80 and £100. These customers will also be offered free loft and cavity wall insulation to further help offset the impact of the increase.

As the UK moves to a low carbon economy, npower is investing heavily in greener generation and is spending £1.7bn to reduce the amount of CO2 it emits by around 33%.

Giuseppe Di Vita, managing director of npower’s residential business, said: “Today’s decision was not an easy one. We always try to protect our customers for as long as possible but sadly higher energy prices are a fact of life. npower is not alone in facing these higher costs, and we expect other suppliers to follow suit very shortly. Anyone struggling to pay their bills, regardless of the time of year, should get in touch immediately.”