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Npower's blaming of 'drafty' houses for high bills prompts criticism

Jan. 24, 2014 at 12:03 AM   |   Comments

LONDON, Jan. 24 (UPI) -- A British firm blames rising heating bills on "old and drafty" houses but consumer advocates say bills are rising even though Britons are consuming less energy.

Npower Chief Executive Paul Massara wrote in the company's "Energy Explained" newsletter Tuesday that Britain enjoys some of the lowest actual unit prices for gas and electricity in Europe, but asserted bills are high "because British houses waste so much energy."

"If we can increase the efficiency of the U.K.'s old and drafty housing, we can ensure that annual energy bills are some of the lowest, too," Massara wrote.

The newsletter pointed the finger at "16 different policy and regulatory costs" that will have an impact on British energy bills by 2020, including the cost of upgrading the country's energy infrastructure.

Npower, a subsidiary of the German energy giant RWE, raised its average consumer bills by 10 percent late last year, affecting more than 3 million customers, and recently was rated as the worst of Britain's "big six" power utilities in terms of customer satisfaction.

Massara wrote the column was meant as a way to relate "real facts," "restore trust" in the energy industry and to "dispel some myths" while the country debates its energy future.

"Suppliers control less than 20 percent of a bill and I want to shine a light on all the different aspects of energy -- particularly to reassure my customers that there is no hidden profit," he said.

Ofgem the government agency that regulates the network charges, disputed Massara's claim that annual network carriage charges will rise from $424 to $520 per household by 2020.

"We welcome Npower's effort to inform the energy debate, however their data on network costs is incorrect and misleading," an agency spokesman said. "We offered to help Npower improve the accuracy of their numbers for network charges and it is disappointing that they did not engage fully with us until after the document had been circulated."

Ofgem, it said, "directly regulates the money that network companies can earn through charges. Given this level of certainty we can see that after 2014 network costs per household are expected to remain broadly flat in real terms. It is unclear how Npower can state with any authority otherwise."

Npower subsequently admitted it had overestimated the cost by $24 after being challenged by Ofgem, The Guardian reported.

The company's citing of "drafty housing" for higher energy costs also brought criticism from consumer advocates as an attempt to shift the blame onto cash-strapped customers.

"The reason why U.K. energy bills are high is both that the housing stock is not energy efficient but also that suppliers have kept whacking up prices year after year," Mark Todd, co-founder of consumer website Energyhelpline.com, said in a statement to ITV.

"Suppliers have raised prices by 140 percent in the last nine years while users have cut usage. Typical gas usage is down 34 percent and electricity consumption by 3 percent and this is in part because many customers can no longer afford to heat their homes."

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