The 10% average bill increase will affect about 3.1 million customers, the group said, and follows recent price hikes by British Gas and Scottish & Southern Energy (SSE)
Npower blamed the higher cost of delivering power to homes, meeting Government schemes and rising fuel costs, insisting it makes a “fair return for delivering reliable energy to consumers”.
The price hike will mean an average dual fuel customer’s bill rises by £137 a year, from £1,323 to £1,459.
Npower, the third of the so-called “Big Six” to drive through bill increases, also raised tariffs by 8.9% last November. Bill hikes will add more upward pressure to stubbornly high inflation, which currently stands as 2.7%, far outstripping average wage growth of just 0.7%.
But Paul Massara, Chief Executive, RWE npower, said a bill freeze would not lead to lower sustainable prices because it would not cut the cost of supplying energy, adding that the German group only aims to make a profit of around 5p in the pound.
He said: “Only 16% of the bill is under our control and imposing price controls discourages investment, increases uncertainty and ultimately leads to higher prices.”
Npower said more than 500,000 customers on fixed contracts will not be affected.
British Gas recently increased its electricity bills by 10.4% and gas tariffs by 8.4% – affecting 7.8 million households – while SSE is hitting seven million customers with an 8.2% rise.
Customer-owned energy firm Co-operative Energy also announced a tariff hike of 4.5% but called on its larger rivals to put customers before profits, saying it was absorbing some of the increasing costs of buying wholesale energy.