Npower has been roundly condemned by politicians, consumer groups and comparison sites after it became the fifth of the big six energy suppliers to raise prices.
About 1 million customers on the firm’s standard variable tariff will be hit by a 5.3%, or £64, increase per year from 17 June, taking a typical annual dual-fuel bill to £1,230.
The increase is on par with those announced by British Gas and ScottishPower, but Npower’s standard tariff was already the most expensive by a big supplier.
The German-owned firm said it had not taken the decision lightly, and blamed rising wholesale prices and growing costs from government policies.
Simon Stacey, the Npower managing director for domestic markets, said such costs had “unfortunately been on the rise for some time and we need to reflect these in our prices”.
But the move, just months before the government’s price cap on such tariffs is expected to take effect, sparked an angry response.
Claire Perry, the energy minister, said the rise was extremely disappointing, unjustified and demonstrated why the government was capping prices.
She urged customers to ditch Npower: “Consumers should vote with their feet. Switching suppliers will always help consumers get the best deal.”
Gillian Guy, the chief executive at Citizens Advice, said: “At a time when many energy customers are struggling with their bills, this price rise will be hard to stomach for the approximately 1 million customers affected.”
Comparison site Energyhelpline argued that “no one should pay such high prices for their energy”.
It added that households could save hundreds of pounds by switching to smaller suppliers, pointing out that the 10 cheapest deals on the market ranged from £796 to £829, compared to Npower’s £1,230.
Stephen Murray, energy expert at switching site MoneySuperMarket, said: “This is a chunky rise from Npower – all we need now is something from SSE and it’s a full house from the big six.”
Npower is merging with SSE’s energy supply unit, but the deal is facing a full-scale investigation by the competition watchdog, which said that the merger could increase household energy bills.
SSE is the only one of the big six energy firms not to have announced a price increase. Four of the others have increased their standard tariff, while E.ON increased bills by as much as £50 by removing discounts.
One small supplier said this week that it expects wholesale prices to continue rising this summer, raising the spectre of more rises before the government price cap takes effect next winter.
Challenger firm Bulb said that wholesale costs had already increased 13% since it put up prices 2.8% in February. It said that if wholesale energy prices remain high, bills may have to rise in August.
