Npower CEO Paul Massara has sought to shift the blame for rising energy costs

Npower blasted for 'misleading' report

Energy giant Npower has been blasted for “incorrect and misleading” figures in a report on rising energy prices.

In the supplier's second 'Energy Explained' report Npower chief executive Paul Massara said the actual unit prices of gas and electricity in the UK are among the lowest in Europe, but bills are high because the country's "old and draughty" houses waste so much energy.

He warned that the cost of upgrading the nation's energy infrastructure is set to increase bills unless households can take action through efficiency measures. The report claims that at least 16 different policy and regulatory costs will have a direct impact on energy bills by 2020.

The report also claims that network charges will rise from £295 per customer to £314 between 2015 and 2020, but regulator Ofgem disputed this saying that it sets the network charges and they are due to remain flat over that time.

The firm later corrected the figures to reflect a rise £15 lower than previously calculated, but an Ofgem spokesman said: "We welcome Npower's effort to inform the energy debate, however their data on network costs is incorrect and misleading. We offered to help Npower improve the accuracy of their numbers for network charges and it is disappointing that they did not engage fully with us until after the document had been circulated.

"Ofgem directly regulates the money that network companies can earn through charges. Given this level of certainty we can see that after 2014 network costs per household are expected to remain broadly flat in real terms. It is unclear how Npower can state with any authority otherwise."

Npower announced a 10 per cent average bill increase in the latest round of price rises late last year, affecting about 3.1 million customers, but has said that it will reduce bills as a result of a shake-up of government green levies.

But in the report Massara claimed prices were not just down to the "big six" firms and that more than 140 companies were involved in the industry in the UK including more than 80 that trade energy products on the markets.

"Suppliers control less than 20 per cent of a bill and I want to shine a light on all the different aspects of energy, particularly to reassure my customers that there is no hidden profit,” he said.

He claimed the business made only a 3.2 per cent profit in their retail business in the first nine months of 2013, while their power stations made a loss of £59m.

In its first report last year, Npower predicted average household bills would rise by £240 to £1,487 by 2020, primarily because of "unprecedented investment in new infrastructure and the cost of improving energy efficiency in people's homes".

A Department of Energy and Climate Change spokeswoman said: "Npower's analysis is incorrect on so many levels. Government estimates that the impact of our social and environmental programmes will in fact lower energy bills compared to what they would be in the absence of our policies, by as much as £166 in 2020.

"A number of the policies listed by Npower don't have any impact on household energy bills, including the Renewable Heat Incentive, Climate Change Levy and the Carbon Reduction Commitment."

Recent articles

Info Message

Our sites use cookies to support some functionality, and to collect anonymous user data.

Learn more about IET cookies and how to control them