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Npower's energy price hike makes mockery of Ofgem warning

Published: 12:22 03 Feb 2017 GMT

Npower's energy price hike makes mockery of Ofgem warning
Spark to a flame - Npower's decision is likely to leave customers fuming

Forget the rail strikes, Npower has piled on more misery to Britain's homeowners by hiking its standard cost of gas and electricity by almost 10%.

It comes as a slap in the face to the watchdog Ofgem, which only weeks ago said energy suppliers had no excuse to raise prices and warned against it.

Npower is one of the so-called 'Big Six' suppliers and says it will raise electricity prices from March 16 by 15% and gas prices by 4.8%.

This means a dual fuel customer's energy bill will rise by an  average of 9.8%, or £109 per year -  the largest hike for a big six supplier since 2013.

Simon Stacey, Npower's managing director of domestic markets, had cold comfort for households, already stretched by rising inflation and a lack of wage growth.

"This is a hugely difficult decision, and we've delayed the date this takes effect until after the coldest months of the year," he said.

Npower blamed the usual suspects of  climbing wholesale prices, the cost of new measures such as smart metering and renewable energy support, for the price hike.

Ofgem recently said the cost of supplying energy had increased 15% over the last year but added large suppliers should have shielded  against passing this to customers by buying energy in advance at lower cost.

In a supplier cost analysis, Ofgem, the regulator, found that electricity wholesale costs accounted for six percentage points of the increase on the cost index, with gas wholesale costs accounting for 6.6 points.

Levies on environmental and social programmes accounted for 2.9 percentage points of the rise. Other costs, such as energy transmission and distribution, were down a tad.

Among the other biggies, EDF Energy announced an electricity price rise in December last year - by 8.4% but it is lowering its gas prices by 5.2% in the spring.

Another big company SSE (LON:SSE) has already hinted there will be  hikes but it, along with British Gas, have said they would keep prices on hold until the end of March.

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