RWE npower joins British utilities cutting energy bills

by Reuters
Wednesday, 8 January 2014 14:00 GMT

* RWE npower last of big six utilities to reduce bills

* Dual-fuel customers to see 50 stg cut to annual bills

By Nina Chestney

LONDON, Jan 8 (Reuters) - RWE npower on Wednesday became the last of Britain's "big six" utilities to say it will reduce bills for domestic customers in response to government policies.

The six had angered the public by unveiling above-inflation price rises, but agreed in December to pass on savings from a government plan to shift some environmental taxes away from energy bills in an effort to cut soaring costs in the run-up to an election due in 2015.

The debate over how much Britons pay to heat and light their homes has become a hot political issue since Ed Miliband, leader of the opposition Labour Party, said in September he would freeze consumer bills for 20 months if he won power.

RWE npower said dual-fuel customers - or those who buy both gas and electricity from the same supplier - who were faced with a price increase in December 2013 would typically see a 50 pound ($82) reduction in their annual energy bill, effective from Feb. 28.

The average annual gas and electricity bill in Britain is around 1,315 pounds per household, energy regulator Ofgem said last September.

All electricity customers whose prices did not increase in December will receive a 12 pound ($20) rebate in autumn this year, the company added.

The government has promised to cut rising energy costs by transferring the cost of helping poor families with their bills to general taxation from household bills.

It has also said the cost of a scheme to subsidise the insulation of houses - also included in household energy bills - will be spread over a longer period to bring down its cost.

RWE npower's price cut will not occur until the end of February because the government is still consulting on some policies and changes to legislation will be required, RWE npower said in a statement.

"This reduction is a reflection of the recent review of two government policies and their impact on household energy bills and it is a welcome start," said Paul Massara, chief executive of RWE npower. "The natural next step would be to review all the impact of all policies that add to business and household energy bills."

The move by RWE npower - part of Germany's RWE AG - follows a similar announcement by SSE on Tuesday and previous moves by Centrica's British Gas, E.ON , EDF and Scottish Power.

Britain's biggest six energy firms supply 98 percent of the country's homes. Utilities are not obliged to pass on the savings enabled by the government, but due to public outrage over rising prices they have been expected to do so.

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