Npower to hike energy bills for one million customers

Big six energy retailer npower announced a major price increase on Friday, taking its typical dual fuel annual energy bill up by an average of 5.3% or £64, across all payment types.

The company - a subsidiary of German firm Innogy - said the rise was made up of an average rise of 4.4% on gas and 6.2% on electricity.

It said the new changes would impact around one million of npower’s domestic customers, and would come into effect on 17 June.

More than 60% of its total customers would not receive a price increase, the board confirmed, with those customers likely on fixed-term energy deals, a prepayment meter or on the Safeguard tariff.

The price change largely stemmed from increases in policy and wholesale energy costs, which the company claimed were “widely acknowledged” to have continued to rise since it implemented its last price change in March last year.

Ofgem cited the same drivers for its 5.5% increase to the prepayment and Safeguard tariff in April.

Npower said it already had a higher percentage of fixed term tariff customers than most large suppliers, and continued to work hard to encourage customers to switch.

It pointed out that it offered a choice of short, medium and long-term fixed deals, and would be writing to those affected by the announcement with details of the best value tariff for them.

The company also launched ‘Price Freeze June 2022’ exclusively for those customers, which it said was the longest fix on the market and protected customers from potential rises over the next four years.

“Announcing this price change today isn’t a decision we’ve taken lightly,” said npower’s managing director of domestic markets Simon Stacey.

“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.”

Stacey said less than half of npower’s customers were on its standard tariff.

“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 - whether that’s our green product or a short, medium deal, or the market’s longest fix.

“While existing customers who are currently on a fixed deal, have a prepayment meter or on the Safeguard tariff are protected from these increases, we encourage any customer who is struggling with their energy bills to contact us.”

The move comes as npower undergoes a change of ownership, as its parent firm Innogy is set to be taken over by German energy giant E.ON, in a complex asset-swap deal with its current owner RWE.

It was also engaged in a bid to merge with UK retail competitor SSE, with the competition watchdog confirming further investigation of the deal would take place earlier this week.

The Competition and Markets Authority said the tie-up could push up energy prices.