Npower fuels price war with cuts - but not just yet

Npower fuels price war with cuts - but not just yet

Npower has today become the second big domestic energy supplier to announce cuts in gas and electricity bills, making it the cheapest supplier - for now.

The company, which is owned by the German group RWE, said gas prices would fall by 16% while average electricity bills would come down by 3%.

However, the reductions were branded as "too small and too far in advance". The lower prices do not come into force until April 30 - well after the coldest weather has passed - and do not take into account the total cuts in the wholesale market.

Npower said the cuts would make it cheaper than British Gas for the three million "dual fuel" customers who buy their gas and electricity from the company. Consumers paying by cash or cheque would pay £908 a year compared with the £953 paid by British Gas customers after the price cuts took effect, it claimed. Overall, the company has six million customers.

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Kevin Miles, Npower's residential managing director, said: "We provided more protection to our customers during a time of record wholesale prices. Today's announcement confirms Npower's commitment to offer value to our customers."

Adam Scorer, campaigns director at the consumer body Energywatch, said: "This is little more than a distant promise of cheaper gas."

Joe Malinowski, founder of the energy price comparison website TheEnergyShop.com, said: "When you consider that wholesale electricity prices have fallen by over 50% in the last nine months, the 3% cut in electricity prices is absolutely miserly. Npower's customers have seen their electricity bills increase by 60% over the past three years and a cut like this will barely even get noticed."

Karen Darby, chief executive of the price comparison and switching service SimplySwitch.com, agreed. Npower's move is further evidence that the power companies are locked in a price war with each keen to be seen as offering the lowest prices. Ten days ago British Gas said it would cut gas prices by 17% and electricity bills 11% from March 12.

Powergen also unveiled lower prices for new customers last week but has yet to announce cuts for existing customers.

Following British Gas's move at the beginning of the month, Scottish and Southern Energy and Scottish Power have indicated that they will follow suit with price cuts shortly.

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