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Npower to cut electricity bills Npower to cut electricity bills
(about 19 hours later)
Energy supplier Npower is to cut electricity prices for UK householders by 8% at the end of March.Energy supplier Npower is to cut electricity prices for UK householders by 8% at the end of March.
The company said that the move would reduce the average annual household electricity bill by £43, but gas prices would be unchanged.The company said that the move would reduce the average annual household electricity bill by £43, but gas prices would be unchanged.
It is the last of the big six energy companies to announce a reduction in either gas or electricity bills for customers this year.It is the last of the big six energy companies to announce a reduction in either gas or electricity bills for customers this year.
It comes six months after Npower put up electricity bills by 14%.It comes six months after Npower put up electricity bills by 14%.
"Wholesale prices are still higher than in 2007 but we are determined to reduce prices for our electricity customers," said Kevin Miles, chief executive of Npower retail."Wholesale prices are still higher than in 2007 but we are determined to reduce prices for our electricity customers," said Kevin Miles, chief executive of Npower retail.
"We will continue to keep our costs and prices under review to ensure that we remain competitive and give our customers value for money.""We will continue to keep our costs and prices under review to ensure that we remain competitive and give our customers value for money."
Wholesale costsWholesale costs
Npower blamed rising wholesale prices for the double increase in household tariffs in 2008.Npower blamed rising wholesale prices for the double increase in household tariffs in 2008.
Price cuts in 2008 British Gas: gas prices down 10% on 19 FebruaryScottish and Southern: electricity tariffs down 9% and gas down 4% on 30 MarchScottish Power: gas prices down 7.5%, electricity down 3% on 31 MarchEDF Energy: electricity down 8.8% in some areas on 31 MarchE.On: electricity tariffs down 9% on 31 MarchNpower: electricity prices down 8% on 31 March Battling bills - what help is there?Price cuts in 2008 British Gas: gas prices down 10% on 19 FebruaryScottish and Southern: electricity tariffs down 9% and gas down 4% on 30 MarchScottish Power: gas prices down 7.5%, electricity down 3% on 31 MarchEDF Energy: electricity down 8.8% in some areas on 31 MarchE.On: electricity tariffs down 9% on 31 MarchNpower: electricity prices down 8% on 31 March Battling bills - what help is there?
The last of these pushed up electricity bills by 14% and gas tariffs by 26% at the start of September 2007.The last of these pushed up electricity bills by 14% and gas tariffs by 26% at the start of September 2007.
But Npower said that a lot of its six million customers were protected from the full effect of the soaring wholesale costs at that time. This, the company believed, justified its position to keep gas prices unchanged now.But Npower said that a lot of its six million customers were protected from the full effect of the soaring wholesale costs at that time. This, the company believed, justified its position to keep gas prices unchanged now.
Recent analysis by energy regulator Ofgem suggested that wholesale energy costs peaked in December before falling in early 2009. The report forecasts these costs will fall throughout the rest of the year.Recent analysis by energy regulator Ofgem suggested that wholesale energy costs peaked in December before falling in early 2009. The report forecasts these costs will fall throughout the rest of the year.
Npower said that three million of its customers would benefit from the electricity price cuts, and its gas prices remained competitive compared with the other suppliers.Npower said that three million of its customers would benefit from the electricity price cuts, and its gas prices remained competitive compared with the other suppliers.
But Scott Byrom, utilities manager from moneysupermarket.com, said: "This cut from Npower means on average British bill payers have seen a 2.3% decrease to the cost of their gas, and a 4.6% cut to electricity so far this year - cold comfort for those still struggling to pay their bills for energy used during the winter months."But Scott Byrom, utilities manager from moneysupermarket.com, said: "This cut from Npower means on average British bill payers have seen a 2.3% decrease to the cost of their gas, and a 4.6% cut to electricity so far this year - cold comfort for those still struggling to pay their bills for energy used during the winter months."
Other movesOther moves
A number of the other major energy suppliers announced they were making changes to tariffs at the end of March.A number of the other major energy suppliers announced they were making changes to tariffs at the end of March.
The regulator recently gave suppliers a relatively clean bill of health
More than seven million British Gas customers saw a 10% cut in gas bills take effect from 19 February.More than seven million British Gas customers saw a 10% cut in gas bills take effect from 19 February.
Scottish & Southern will cut the price of electricity by 9% and gas by 4% from 30 March.Scottish & Southern will cut the price of electricity by 9% and gas by 4% from 30 March.
The following day, Scottish Power, which has 5.2 million UK customers, will cut gas prices by 7.5% on average and electricity bills by 3%.The following day, Scottish Power, which has 5.2 million UK customers, will cut gas prices by 7.5% on average and electricity bills by 3%.
EDF Energy has announced it is cutting electricity bills by an average of 8.8% for customers in London, the South East and South West of England, as well as Wales and Scotland. E.On has announced a 9% cut. However, both their gas tariffs will remain unchanged.EDF Energy has announced it is cutting electricity bills by an average of 8.8% for customers in London, the South East and South West of England, as well as Wales and Scotland. E.On has announced a 9% cut. However, both their gas tariffs will remain unchanged.
Regulator Ofgem announced last year that it would be conducting a quarterly review of the link between wholesale prices and domestic bills. The first was published on 2 March.Regulator Ofgem announced last year that it would be conducting a quarterly review of the link between wholesale prices and domestic bills. The first was published on 2 March.
It repeated the conclusion drawn following a major review of the energy market - that there was no evidence of collusion between the "big six" suppliers in setting prices.It repeated the conclusion drawn following a major review of the energy market - that there was no evidence of collusion between the "big six" suppliers in setting prices.
Moreover, it stressed that there was no evidence that suppliers passed on increasing wholesale costs to customers, but then failed to drop prices when costs fell.Moreover, it stressed that there was no evidence that suppliers passed on increasing wholesale costs to customers, but then failed to drop prices when costs fell.
But Robert Hammond, energy expert at watchdog Consumer Focus, said: "Npower's 8% reduction is yet another derisory cut in the cost of one fuel only, coming into effect when winter is effectively over and people are using less energy.But Robert Hammond, energy expert at watchdog Consumer Focus, said: "Npower's 8% reduction is yet another derisory cut in the cost of one fuel only, coming into effect when winter is effectively over and people are using less energy.
"It will do little to ease the burden for consumers bracing themselves for the biggest ever energy bills to land on their doormats.""It will do little to ease the burden for consumers bracing themselves for the biggest ever energy bills to land on their doormats."