npower price hike (12 October 2012) comment
npower today (12 October 2012) became the third of the Big 6 energy suppliers to announce energy price increases. From 26 November 2012, the vast majority of npower’s 6.5 million customer accounts will see their gas and electricity prices increase by 9%. This will increase average dual fuel bills by £109 a year meaning customers paying by monthly direct debit will see their annual bills rise to £1,257 while those paying by cash or cheque quarterly will see bills rise to £1,352.
As far as apportioning blame for the increases, npower is singing from the same sheet as both British Gas and SSE. The blame has been levelled on rising costs including rising wholesale prices, rising infrastructure charges and rising environmental costs as a result of government policies.
npower is also offering free loft and cavity wall insulation to its customers until the end of the year and pumping its involvement in the governments Warm Home Discount scheme. All of which is being paid for – you guessed it – with its customers’ money. As we have pointed out before, while we agree that the cost relating to infrastructure and environmental charges have gone up, the wholesale energy cost argument seems to be incorrect. According to data from TheEnergyShop.com, forward wholesale gas and electricity prices are in fact both lower than they were 12 months ago (7% and 10% respectively).
What we think:
SSE, British Gas and npower customers are all facing energy bill misery this winter. For them there is only one option to avoid the increase. Jump ship to a cheaper fixed rate deal. It is the only way to offset the increase and to pick-up an additional saving of £85. That means a total saving of almost £200 compared to the post increase prices. It’s a no brainer. Do it quickly. The cheap fixed deals are running out.
Wholesale Market Data and Statistics