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An attempt by Npower to rebuild trust in the energy sector has backfired, after Ofgem publicly contradicted its sums.
In its second “Energy Explained” report, the energy supplier claimed the average household bill would rise to £1,330 by 2020 without action to save energy. According to Npower’s analysis, policy and regulation costs will rise by a whopping 272 per cent on 2007 levels and network costs by 74 per cent, while supplier costs remain flat.
However, the regulator released a statement saying network costs per household are expected to remain broadly flat and Npower’s data was “incorrect and misleading”.
Npower launched Energy Explained last July to “rebuild trust in our industry by presenting facts rather than opinions”.
In the foreword of Npower’s report, chief executive Paul Massara said: “At times during the current energy debate the facts have been in short supply, particularly amid rumours of profiteering and broken markets…
“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.”
Npower used Ofgem data, but the regulator disputed its conclusions.
An Ofgem spokesperson said: “We welcome Npower’s effort to inform the energy debate, however their data on network costs is incorrect and misleading.
“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 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.”
The dispute appears to centre around charges for using the national gas network and the way Npower has interpreted changes to Ofgem’s notional average household consumption figures.
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