Npower concedes network cost error after Ofgem intervention

Npower has backed down on claims around network cost rises after Ofgem accused the supplier of getting its sums wrong.

The dispute flared up on Tuesday, the day before Npower was set to publish its second “Energy Explained” report. The stated aim of the report was to “rebuild trust in our industry by presenting facts rather than opinions”.

However, Ofgem said the supplier had got its facts wrong and network costs will remain broadly flat to 2020. Npower said network costs would rise by 74 per cent from 2007 levels, to £314 on a typical household bill of £1,330 before energy saving measures.

After last-minute conversations with the regulator, Npower admitted it had overestimated the bill impact of gas network charges. A spokesperson said: “We reviewed the gas network charge costs with Ofgem prior to publication of our report. On further discussion with Ofgem we consider that the total increase in real terms of energy transportation costs is in the region of £5 to £10 per dual fuel customer over the period 2014 to 2020, about £15 lower that we had earlier calculated.”

The revision still allows Npower to claim network charges will rise by up to two thirds over the period, as most of the hike has already occurred since 2007.

Npower’s analysis also found policy and regulatory costs would rise by 272 per cent, while it said supplier costs would remain flat. These numbers are also likely to come in for scrutiny, as they tell a different story to government figures.

The report aims to show it is not just the “big six” energy suppliers responsible for rising energy prices and break down the different factors.

Paul Massara, chief executive of Npower, said: “Supply companies like Npower have control over less than 20 per cent of energy bills, yet they are exposed to 100 per cent of the cost and blamed for 100 per cent of any price rise.”