Npower, Britain’s fourth-largest power supplier has just hiked customer bills by
17 per cent for gas and 13 per cent for electricity.
Npower’s announcement is expected to open the floodgates for further price
rises from rival power companies such as EDF, Scottish & Southern and E.ON,
which owns Powergen. Centrica, the owner of British Gas and the UK’s biggest
supplier, is expected to unveil its own price increases this week.
Npower said that it had been forced to lift the cost of average household
bills for dual-fuel npower customers from £908 to £1,047 because the cost of
buying energy on the wholesale markets had “increased dramatically”.
“Since mid-February 2007, electricity wholesale costs for 2008 have increased
by 66 per cent and gas by 60 per cent,” a statement said. The company also
blamed increased distribution and transmission costs.
Figures show that spot gas prices in Britain remain significantly lower than
in the winter of 2005-06. Average spot gas prices in Britain were 53p per therm
yesterday, 21 per cent lower than two years ago, when a supply squeeze and
severe weather triggered a rise to an average of 64p per therm and briefly to
highs of nearly 200p per therm.
The increase to npower’s standard tariff is effective immediately and will
affect more than two thirds of its 6.8 million customers. Average bills will be
£92 higher for gas and £48 for electricity.
Npower said that, because of regional price differences to reflect
distribution costs, the maximum price rise for gas would be 23.8 per cent and
the maximum increase for electricity would be 27.1 per cent.
Tim Wolfenden, of uSwitch.com, said that
there were still “lots of questions” about the motivation for npower’s price
increases. It was impossible to say whether npower’s price rises were justified
because its statement contained no detailed explanation of its rationale.
Sources:
http://business.timesonline.co.uk/
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