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| Npower becomes latest major energy supplier to announce price rises | Npower becomes latest major energy supplier to announce price rises |
| (about 5 hours later) | |
| The storm over rising energy prices intensified on Monday when npower became the third major supplier to announce inflation-busting rises and told customers to use less energy if they wanted lower bills. | The storm over rising energy prices intensified on Monday when npower became the third major supplier to announce inflation-busting rises and told customers to use less energy if they wanted lower bills. |
| The company said it would increase prices by an average of 10.4% from 1 December, adding £137 to the average annual dual fuel bill, which will rise to £1,459. Gas prices will increase by 11.1% and electricity by 9.3%. | |
| About 3.1 million UK customers will be affected by the rise, which follows similar moves by fellow big six energy providers SSE and British Gas in the last two weeks. | About 3.1 million UK customers will be affected by the rise, which follows similar moves by fellow big six energy providers SSE and British Gas in the last two weeks. |
| Npower chief executive Paul Massara took to YouTube to defend the decision which he said was "a really hard one". He advised customers to reduce their energy consumption to save money. "It may be a cliche but it's true, the cheapest unit of energy is always the one that isn't used," he said. | Npower chief executive Paul Massara took to YouTube to defend the decision which he said was "a really hard one". He advised customers to reduce their energy consumption to save money. "It may be a cliche but it's true, the cheapest unit of energy is always the one that isn't used," he said. |
| The price rise further antagonised consumer groups which said a rise in tariffs of more than three times inflation would be a huge blow for households just as winter arrives. Citizens Advice said it had received double the usual number of energy queries following the recent price rises. "Yet again profits are being put before customers," said chief executive Gillian Guy.Which? called for an independent review of all government energy policy and wholesale market costs, with an assessment of whether consumers are getting value for money. | |
| Npower's move came on the same day the government announced an agreement with French-owned EDF to build a new nuclear plant at Hinkley in Somerset, the UK's first new power station in 20 years. | Npower's move came on the same day the government announced an agreement with French-owned EDF to build a new nuclear plant at Hinkley in Somerset, the UK's first new power station in 20 years. |
| Critics have warned that a government guarantee to pay £92.50 a megawatt hour of electricity produced could lead to higher bills for consumers. | Critics have warned that a government guarantee to pay £92.50 a megawatt hour of electricity produced could lead to higher bills for consumers. |
| Labour leader Ed Miliband has pledged to freeze energy prices for 20 months if his party is elected in 2015, and he responded angrily on Monday, accusing npower of over-charging its customers. | |
| He said: "Neither the energy companies nor the government want Labour's price freeze because they are content for prices to carry on rising at 10% a year. | He said: "Neither the energy companies nor the government want Labour's price freeze because they are content for prices to carry on rising at 10% a year. |
| "It's another day, another 10% price rise in energy. We've got a prime minister who is standing up for the energy companies, not hard-pressed families. That's why we need Labour's price freeze. | "It's another day, another 10% price rise in energy. We've got a prime minister who is standing up for the energy companies, not hard-pressed families. That's why we need Labour's price freeze. |
| "The reason prices are going up is because you've got a broken market and you've got companies that are overcharging people." | "The reason prices are going up is because you've got a broken market and you've got companies that are overcharging people." |
| David Cameron last week urged consumers to switch providers following the decision by British Gas to raise energy bills by about 10%. Thousands of people took to Twitter to express their anger over the rise imposed by Britain's biggest power provider, turning the company's attempts to head off criticism through social media into a public relations disaster. | David Cameron last week urged consumers to switch providers following the decision by British Gas to raise energy bills by about 10%. Thousands of people took to Twitter to express their anger over the rise imposed by Britain's biggest power provider, turning the company's attempts to head off criticism through social media into a public relations disaster. |
| Nick Clegg, speaking on Monday night's ITV programme The Agenda, said: "Profit is what drives a lot of these things but you can't operate without public consent so I think they do need to be very careful that they don't sort of exhaust public consent and confidence that they're doing the right thing by these very, very significant price hikes." | |
| British Gas's decision followed an announcement by SSE that it would increase prices by 8.2%. | British Gas's decision followed an announcement by SSE that it would increase prices by 8.2%. |
| Npower echoed SSE and British Gas, blaming the rises on increased wholesale prices and government initiatives whichhave an impact on bills. It also argued it was taking "a fair return" for delivering reliable energy supplies. | Npower echoed SSE and British Gas, blaming the rises on increased wholesale prices and government initiatives whichhave an impact on bills. It also argued it was taking "a fair return" for delivering reliable energy supplies. |
| Massara hit out at Miliband's price freeze pledge in a statement online, arguing it would lead to higher prices. | |
| "Only 16% of the bill is under our control and imposing price controls discourages investment, increases uncertainty and ultimately leads to higher prices." | "Only 16% of the bill is under our control and imposing price controls discourages investment, increases uncertainty and ultimately leads to higher prices." |
| Npower last increased household tariffs, by 8.9%, in November 2012. | Npower last increased household tariffs, by 8.9%, in November 2012. |
| The company, which is owned by German group RWE, defended the collective move by energy companies to raise prices. "All suppliers face the same pressures from the wholesale energy market and increasing government and regulatory costs, so there is a natural tendency for prices to move at the same time. | The company, which is owned by German group RWE, defended the collective move by energy companies to raise prices. "All suppliers face the same pressures from the wholesale energy market and increasing government and regulatory costs, so there is a natural tendency for prices to move at the same time. |
| "When Tesco puts up the price of a loaf of bread by 5p, no one is surprised if Sainsbury's does the same, because they are subject to the same costs." | "When Tesco puts up the price of a loaf of bread by 5p, no one is surprised if Sainsbury's does the same, because they are subject to the same costs." |
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