npower has blamed rising wholesale costs, distribution charges and government levies, for the hike. The latter mirror the reasons given by British Gas and SSE in the past couple of weeks.
The changes represent an average increase of 10.4% on household bills or roughly an extra £139 per year.
The rise will affect 3.1 million households across the UK and will come into effect on the 1 December 2013.
The price rise sees npower follow in the footsteps of British Gas and SSE, which raised their gas and electricity prices by 9.2% and 8.2% in the past two weeks.
Consumers can still avoid price rises
Although the remaining big six energy suppliers – E.ON, EDF and Scottish Power – are also expected to hike their prices as we approach winter, it is still possible for consumers to freeze their bills.
Fixed price contracts allow customers to fix their energy prices from any period of time between one and almost four years. These increasingly popular plans are available from each of the big six energy suppliers, as well as a number of smaller providers.
‘Another disappointing announcement from a big energy company’
Energy and Climate Change Secretary Edward Davey said: “This is another disappointing announcement from a big energy company. Some of the big six seem not to have noticed that they are no longer alone in the market – there are now fifteen small suppliers, and some really competitive fixed deals out there.
“Today I’m publishing hard figures on the costs energy companies really face in delivering the Energy Company Obligation (ECO), so consumers can see what this scheme is really costing energy companies.
“These figures – supplied by the energy companies themselves – show that the costs are in line with previous schemes so there should be no need for any increase to consumer bills due to ECO.”
‘Consumers will be going into winter with heavy hearts and lighter wallets’
Ann Robinson, director of consumer policy at uSwitch, said: “With three of the big six energy suppliers hiking their prices, consumers will be going into winter with heavy hearts and lighter wallets. The fear is that even more will feel forced to turn down and switch off in an attempt to keep their energy bills under control. This type of sacrifice is unpalatable at the best of times, but intolerable if we experience a real winter freeze.
“As energy becomes less and less affordable, the more we will see people rationing and going cold. The knock-on cost in misery and the potential impact on health and well-being could be immense. Consumers are paying a steep price for the fact that successive governments have failed to put affordability at the heart of energy policy.
“It’s not worth waiting for the politicians – rhetoric and hot air won’t keep you warm this winter. If you want to protect yourself then the time for action is now. There are some great fixed price deals on the market which can protect you from price hikes for anything up to four winters. Now is also the time to reduce the amount of energy you use – not by going cold, but by making your home as energy efficient as possible. These two steps could be enough to keep your bills affordable and your home still warm.”
‘Labour party’s proposed price freeze […] will not lead to lower sustainable prices’
Paul Massara, CEO RWE npower, said: “I know that any increases to household bills are always unwelcome, and this is not a decision that we have taken lightly. We will continue to take steps where we can to reduce the impact of the external influences on energy bills.
“We only aim to make around 5 pence in every pound in our retail business which we feel is a fair return for delivering reliable energy to consumers and for the risks that we bear.
“We understand that although the Labour Party’s proposed price freeze may appear superficially attractive it will not lead to lower sustainable prices going forward because it doesn’t cut the growing costs of supplying energy. Only 16% of the bill is under our control and imposing price controls discourages investment, increases uncertainty and ultimately leads to higher prices.
“npower is committed to working with consumers, government and industry to deliver a modernised energy market which is affordable for customers and has a lower CO2 content. It is therefore essential that we have an open and honest conversation with customers about how they can take control of their bills and reduce energy consumption.”