N Power Cuts Prices from 30/4/2007.

utilitybroker

"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."

http://business.guardian.co.uk/story/0,,2016193,00.html

peterg1965

In this country we need stronger regulation to compel these energy companies to stop this profiteering. It is an absolute disgrace that wholesale energy prices has come down by 50% in the last 12 months (Gas) and the price reductions do not come anywhere near this figure. I am a 'true blue' and believe in te free market but this is simply not right and is abject profiteering by these companies.

Cardew

peterg1965 wrote:

In this country we need stronger regulation to compel these energy companies to stop this profiteering. It is an absolute disgrace that wholesale energy prices has come down by 50% in the last 12 months (Gas) and the price reductions do not come anywhere near this figure. I am a 'true blue' and believe in te free market but this is simply not right and is abject profiteering by these companies.

Firstly we have a Regulator with more 'teeth' than in any other industry.

Secondly the distribution side of gas and electricity have not been profiteering in recent years; some have made losses of £millions. Also many of the companies who jumped in, hoping to make a quick buck when the market was deregulated, have gone bust or baled out because there was no profit in this market.

Agreed wholesale prices have decreased by 50% but the regulator made this statement:

According to Ofgem's latest figures, wholesale gas prices have increased by 167 per cent over the last three years, whereas customers' bills have gone up 52 per cent.

I am all for keeping these companies in check, but we need to get criticism in perspective.

briskly_2

I agree the electricity cut isn't worth much and they are both too little, too late, but does anyone know if the price cuts will apply to the online tariffs. I'm using Online 4 and wonder if, like British Gas and Click Energy, Npower will "forget" online customers with these cuts?

peterg1965

Interesting, I was only echoing the comments made by MSE Martin when I heard him on BBC Radio 2 last week. Agreed distribution costs may also have increased too, but I suspect they are a mdest proportion of overall costs. Maybe on paper we have a regulator with 'teeth' but probably they are just 'ill fitting dentures', because they fail to do their job of representing the consumer effectively. The big energy companies continue to make excessive profits, agreed that pensions funds and the Treasury are beneficiaries of these profits, but they are obscenely and morally extortionate on a product that is one of life's necessities.

Why is it that the companies have not been compelled to lower prices earlier and why is it that unchecked the energy companies lower prices at the end of the winter thereby maximising profits during periods of high usage.

IGK

To help put things into perspective have a look at historical wholesale gas prices here
These prices are in pence per therm. To convert therms to kWh divide by 29.3071.
So currently the price is about 20p/therm or 0.7p/kWh, and has dropped very sharply in recent weeks. When the huge panic happened last winter the price exploded to well over £1/therm. (£1/therm = 3.4p/kWh).
The current price in the low 20s is quite 'normal'.
So it's understandable that the utility companies had to raise prices substanially, and easy to see how they were losing money. Now it is understandable to expect them to reduce prices.
The timing of their gas purchases is critical to their profitability. I know at least one company lost a lot of money in recent months by paying a high price last autumn to cover this last winter, which turned out to be mild, so they in effect paid a great load of money for a load of expensive gas nobody needed...

unwina

Took this statement from npower question and answers today so i'm guessing that being on Online 4 excludes me from any cuts!.

Are any existing gas customers NOT affected by the price cuts?
Customers on certain gas tariffs are not affected by this kWh rate change:

Fixed Price 2009 customers (because their prices are fixed - they didn't increase in October 2006 when other rates did)
Online customers (because these rates are already very competitive)
First Step customers (because these are aligned to our cheapest tariffs)
npower Tracker customers. (These rates are routinely reviewed each quarter)
NB The changes to the monthly Direct Debit dual fuel discounts WILL apply to any monthly Direct Debit dual fuel customers on the above tariffs.

Cardew

peterg1965 wrote:

Interesting, I was only echoing the comments made by MSE Martin when I heard him on BBC Radio 2 last week. Agreed distribution costs may also have increased too, but I suspect they are a mdest proportion of overall costs. Maybe on paper we have a regulator with 'teeth' but probably they are just 'ill fitting dentures', because they fail to do their job of representing the consumer effectively. The big energy companies continue to make excessive profits, agreed that pensions funds and the Treasury are beneficiaries of these profits, but they are obscenely and morally extortionate on a product that is one of life's necessities.

Why is it that the companies have not been compelled to lower prices earlier and why is it that unchecked the energy companies lower prices at the end of the winter thereby maximising profits during periods of high usage.

I am not defending these companies; they are in business to make money and left unchecked they would form a cartel and really rip us off!!

Raw gas costs are only a part of the cost of a kWh of gas/electricity. The rest is down to infrastructure. After all the water utility companies get their water for nothing but it still costs us money to have it delivered!!!

I have a property in the USA and I personally like their system better. The costs on my electricity bill are split up and shown as distribution costs, fuel costs and taxes. The fuel costs vary month to month and, incidentally you get a lower rate for the first 1000kWh a month(heating and aircon by electricity) then it goes up 2 cents/kWh. They have exactly the same system for gas.

If you want to find out why our costs were not immediately lowered read the Regulator's website. In many cases it was to allow them to recoup their losses(£x hundred million for BG for example).

Incidentally it is not distribution companies that make big profits it is the production companies; albeit they own the distribution companies in many cases.

Also you might like to look at the restrictions placed on companies with regard to reducing prices under deregulation rules. BG have lost millions of customers because they are restricted from dropping their gas(not electricity) prices to undercut rivals.

trickster

unwina wrote:

Took this statement from npower question and answers today so i'm guessing that being on Online 4 excludes me from any cuts!.

Are any existing gas customers NOT affected by the price cuts?
Customers on certain gas tariffs are not affected by this kWh rate change:

Fixed Price 2009 customers (because their prices are fixed - they didn't increase in October 2006 when other rates did)
Online customers (because these rates are already very competitive)
First Step customers (because these are aligned to our cheapest tariffs)
npower Tracker customers. (These rates are routinely reviewed each quarter)
NB The changes to the monthly Direct Debit dual fuel discounts WILL apply to any monthly Direct Debit dual fuel customers on the above tariffs.

BLIMEY!!! If what you said is true, then the guy at the NPower sales truck in Taunton last Thursday told me a blatant lie (or he was misinformed). I said 'I am an online customer, will I benefit from the discount', and the reply was 'yes'.

When the dust settles I will be switching.

peterg1965

I am also an online customer, with a dual fuel account. I cannot believe that I am already paying 17% less than everyone else so if I dont benefit from these price cuts it is back to uswitch for me in a couple of weeks! Hopefully after most of the other companies announce lower prices.

unwina

I never actually said it, i got it from npower

I have another couple of months to pick up my annual discount and then I'll judge whether I am getting adequate price custs or not. I cannot believe that there are not a large number of customers affected here but I don't care what they think they can get away with as its so easy to change these days its a no brainer to me.