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Npower to increase electricity and gas prices Npower announces "shocking" rise in energy prices
(35 minutes later)
Npower has announced one of the largest single price rises implemented by a "Big Six" supplier. Npower has announced one of the largest single price rises implemented by a "Big Six" supplier for years.
The company will raise standard tariff electricity prices by 15% from 16 March, and gas prices by 4.8%.The company will raise standard tariff electricity prices by 15% from 16 March, and gas prices by 4.8%.
A typical dual fuel annual energy bill will rise by an average of 9.8%, or £109.A typical dual fuel annual energy bill will rise by an average of 9.8%, or £109.
Npower said the changes would affect about half of its customers. The other half are on fixed-term deals and will see no price rise. Ofgem said Npower would have to justify the decision to its customers. And Paul Massara, a former boss of the company, called the rises "shocking".
Npower said the changes would only affect about half of its customers. The other half are on fixed-term deals and will see no price rise.
However, 1.4 million customers on existing standard tariffs will be offered a four-year fixed-price tariff with a 4.8% discount.However, 1.4 million customers on existing standard tariffs will be offered a four-year fixed-price tariff with a 4.8% discount.
It blamed increases in wholesale energy costs, and the cost of delivering government policies such as smart meters and the renewables obligation.
However, two weeks ago the regulator, Ofgem, told suppliers they should absorb the costs of wholesale price rises by buying energy in advance.
Paul Massara, a former chief executive of Npower, tweeted that the rises were "shocking".
'Difficult decision''Difficult decision'
Npower blamed increases in wholesale energy costs, and the cost of delivering government policies such as smart meters and the renewables obligation.
However, two weeks ago the regulator, Ofgem, told suppliers they should absorb the costs of wholesale price rises by buying energy in advance.
In a statement on Friday, Ofgem said that wholesale costs had risen in the last year, after falling over the previous two to three years.
"However, we don't see any case for significant price increases where suppliers have bought energy well in advance. Npower must therefore justify the decision to its customers," a spokesperson said.
The announcement comes after three other suppliers - British Gas, E.on and SSE - announced they would keep prices on hold until the end of March.The announcement comes after three other suppliers - British Gas, E.on and SSE - announced they would keep prices on hold until the end of March.
EDF cut its gas prices by 5.2% last month, but will raise electricity charges by 8.4% from 1 March.EDF cut its gas prices by 5.2% last month, but will raise electricity charges by 8.4% from 1 March.
Npower said it was the first time it had raised prices for three years.Npower said it was the first time it had raised prices for three years.
"This is a hugely difficult decision, and we've delayed the date this takes effect until after one of the coldest months of the year," said Simon Stacey, Npower's managing director of domestic markets."This is a hugely difficult decision, and we've delayed the date this takes effect until after one of the coldest months of the year," said Simon Stacey, Npower's managing director of domestic markets.
Prepayment customers will not be affected by the increase, and 80,000 people who receive a warm home discount will in effect pay no increase until May. Pre-payment customers will not be affected by the increase, and 80,000 people who receive a warm home discount will in effect pay no increase until May.