'Unfair' Npower contracts enrage electricity buyers

2 November 2000
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02 November 2000 | Liam O'Brien

Electricity buyers' anger rose this week with claims that the collapse of key power supplier Independent Energy UK was prompting unfair price increases.

Independent - the first of the new breed of suppliers to lead the way with price reductions - went into receivership last month and was subsequently bought out by competitor Npower. Electricity buyers have since had their Independent contracts torn up by Npower, which has been charging them higher "pool" rates for electricity until new contracts are drafted.

The hundred-plus former Independent customers are now being offered fixed-term contracts by Npower that are up to 100 per cent more expensive than those under Independent.

Ian Dobson, chairman of the CIPS energy committee, said: "Npower has been writing to its industrial customers, saying: 'you can sign with us and here's our price. If you don't like it, go elsewhere.' But the customers have very little choice given that a lot of the suppliers have their portfolio full up."

Large users of electricity - those companies spending £250,000 or more a year - are facing annual increases of around £25,000, which they hadn't budgeted for, if they sign the new Npower contract.

Raw material processing company Liston is set to pay £2,500 on top of its expected £100,000 Independent bill.

The firm's development director, Mark Edwards, said: "We are angry about this because once Npower had bought Independent, we were notified by them that we would have to go on the pool and that the replacement contract would be significantly more expensive. It was unprofessionally managed."

A spokesman for energy regulator Ofgem said that it would not be investigating the Npower price hikes, adding that Ofgem had no control over the rates charged to industrial users of 100kW and above.

In a written statement, Npower said that its short-term contracts covered the cost of supply only. It added that Npower had worked round the clock on providing quotes to customers for commercially viable long-term contracts.

SMnov2000

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