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Npower boss aiming to dispel myths to restore trust

The chief executive of npower has said he wants to dispel myths about the energy industry in a bid to restore trust in the under-fire sector.

Mr Massara said the actual unit price of energy in the UK was one of the lowest in Europe, but claimed bills are high because British houses waste so much energy.

In the supplier's second "Energy Explained" report, the chief executive said: "At times during the debate on energy, facts have been in short supply, but we urgently need to dispel some myths to restore trust in the energy industry.

Npower chief executive Paul Massara claimed claimed bills are high because British houses waste so much energy. Credit: PA Wire

"Suppliers control less than 20% of a bill and I want to shine a light on all the different aspects of energy, particularly to reassure my customers that there is no hidden profit. We made a 3.2% margin in our retail business in the first nine months of 2013.

"Over the same period our power stations were struggling to recoup the hundreds of millions of pounds in investment required to build them, and made a loss of £59 million."

Earlier, industry regulator Ofgem accused npower of "misleading" consumers with "incorrect" data on network costs.

'Old and draughty houses' to blame for UK's energy bills

Energy bills in the UK are high because the country's "old and draughty" houses waste so much gas and electricity, the chief executive of npower has claimed.

Paul Massara said the actual unit prices of gas and electricity in the UK are among the lowest in Europe, but bills were high "because British houses waste so much energy".

The chief executive of npower Paul Massara has blamed the UK's high energy bills on the country's "old and draughty" houses. Credit: PA Wire

In the supplier's second "Energy Explained" report, Mr Massara said: "If we can increase the efficiency of the UK's old and draughty housing, we can ensure that annual energy bills are some of the lowest too."

The npower chief executive warned consumers that the cost of bills was set to increase unless households introduce efficiency measures.

Read: Anger over energy suppliers British Gas and npower's hike in prices

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Regulator 'disappointed' with npower costs claim

An official Ofgem response to npower's company costs announcement read:

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.

Ofgem: npower's cost data is 'incorrect and misleading'

Npower had claimed that rising bills had a lot to do with increasing "network costs". Credit: PA

Energy regulator Ofgem has accused npower of producing a "misleading" report about the cost of producing gas and electricity.

The firm had argued that rising costs of transporting energy meant they could do little to control the prices charged to consumers.

Npower had released documents claiming those transportation costs would increase by around 20% by 2020, but Ofgem said the data was "incorrect and misleading".

npower: We made some mistakes and put things right

Energy firm npower has issued an apology after it was found to have breached energy sales rules, saying, "We made some mistakes and we've put things right".

The firm's website states: "After a thorough investigation, it is fair to say there were some requirements of our licence conditions we didn't meet at that time. We're sorry.

npower sign.
npower said around 125,000 customers who receive the Warm Home discount will be given at least an extra £25. Credit: Press Association

"We've identified the relevant issues and addressed them completely, putting right what was wrong and learning valuable lessons in the process.

"We'll be giving at least an extra £25 to around 125,000 customers who already receive the Warm Home discount".

Read: npower's £3.5m payout for breaching sales practise rules

Ofgem: npower has 'done the right thing'

Energy regulator Ofgem said npower has "done the right thing" after the firm agreed to pay £3.5 million for breaching energy sales rules.

Sarah Harrison, Ofgem's senior partner in charge of enforcement said:

npower has done the right thing by stepping forward and recognising that, whilst it was making changes to improve its sales processes, weaknesses remained which affected consumers’ ability to compare supplier offers fairly.

These issues have been fully addressed by npower and Ofgem welcomes the company’s actions and its agreement to pay £3.5m to directly benefit vulnerable consumers.

Read: npower's £3.5m payout for breaching sales practise rules

Read: npower's billing error apology

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npower 'fell short of Ofgem's tougher marketing rules'

Energy firm npower "fell short of the standards set by Ofgem’s tougher 2009 marketing rules", the regulator said.

Ofgem's investigation centred on the sales processes and information used by the firm when customers were making decisions about whether to switch supplies to npower.

npower bills.
npower will pay £3.5 million to help vulnerable customers following the investigation. Credit: Andy Hepburn/PA Wire

The regulator said npower has "remedied all the issues raised" by the investigation, adding, "all breaches ceased by September 2012".

Read: npower to pay £3.5m after breaching energy sales rules

npower to pay £3.5m after breaching energy sales rules

npower has agreed to pay £3.5 million to help vulnerable customers after it was found to have breached energy sales rules on the doorstep and over the phone, Ofgem announced:

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Npower agrees to pay £3.5million to help vulnerable customers following Ofgem energy sales investigation - http://t.co/sWNPSqhF7z

npower boss facing 'reduced bonus' over poor service

The boss of energy firm npower has said he would be receiving a "much reduced" bonus because of his company's poor customer service.

Chief executive Paul Massara apologised for what regulator Ofgem dubbed the "serious deterioration" in customer service.

He told Daybreak: "The fact is we haven't delivered the customer service they deserve.

"When the board sit down and review my bonus they will reduce my bonus because I haven't actually delivered for customers."

Energy companies guilty of 'outrageous blackmail'

Ann Robinson
Ann Robinson accused energy companies of "outrageous blackmail". Credit: DaybreakITV

Energy companies were guilty of "outrageous blackmail", according to a consumer campaigner, who saw the latest attempt to cut bills by £50 as an empty gesture.

"I'd be more impressed if energy companies had said they were going to lower bills by an average of £50 and were going to do it now," Ann Robinson of Uswitch told Daybreak.

She expressed scepticism over the "Big Six" energy companies motivation and what the Government could do to intervene on behalf of struggling consumers:

"I think there is a limit to what can be done. It is playing around the edges. It is not real. I also hear for example, is that one of things that the energy company is looking to is to delay even more the smart meter programme."

Read more: npower's billing error apology

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