npower announced yesterday that its electricity and gas prices will increase by 9.3% and 11.1% respectively* from 1 December.

The main drivers behind this rise said npower are increases in delivering energy to homes, fulfilling government schemes and the raw materials we use to generate energy.

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 (5%) 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."

In response the Energy and Climate Change Secretary Edward Davey said yesterday:

Gas Flame (PD)"This is another disappointing announcement from a big energy company. Some of the Big 6 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."

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