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Last Updated: Friday, 25 January 2008, 11:05 GMT
Npower top for customer cut-offs
Npower energy bill
Npower increased gas and electricity prices at the beginning of January
Npower must do more to help customers who struggle to pay their energy bills, warns the regulator Ofgem.

The supplier cut off 70 gas customers per 100,000 for non-payment of bills in 2006, almost double the number disconnected by EDF, rated second.

Ofgem said the company's procedures needed changing to match improvements demonstrated by its rivals.

Npower said it "refutes" Ofgem's claims, and insisted that it never disconnects vulnerable customers.

The review is published in the wake of large price increases from Npower, EDF and British Gas.

'Increased focus'

Suppliers have a number of obligations in relation to customers facing financial difficulties. In addition, Ofgem and Energywatch jointly published good practice guidelines in 2003.

According to the regulator's latest debt and disconnection review, most suppliers have shown an "increased focus" in this area.

It is vital that suppliers ensure they are offering the best support to people in debt
Alistair Buchanan, Ofgem

However, the overall number of customers cut off for non-payment of their energy bills is rising sharply, up from 2,913 in 2005 to 5,117 in 2006.

Some estimates suggest the total for 2007 could be as high as 9,000 or 10,000.

British Gas does not currently disconnect any customers, so the rise is due to the activities of the other main suppliers - Npower, EDF Energy, E.On, Scottish Power and Scottish and Southern Energy.

'Best practice'

This would still be significantly below the level reached in 2001, when more than 26,000 customers were disconnected, but the scale of the recent increase is causing concern.

The average level of customer debt owed to suppliers has also been growing.

"At a time when some energy suppliers have announced double-digit price rises, it is vital that suppliers ensure they are offering the best support to people in debt or danger of falling into debt," said Ofgem chief executive Alistair Buchanan.

"This is why Npower must do more to match the best practice set by the leaders in this field.

"Disconnections are down significantly from the record levels seen in 2001, but there are no grounds for complacency and the report highlights some key areas that need further attention by all suppliers," he added.

A spokesman for Npower, the UK's fourth-largest energy supplier, said the company "refutes" Ofgem's claims.

He insisted it offered a wide range of help to customers who were struggling with their bills.

"Higher disconnections are not due to poor processes," the spokesman said.

"A supply disconnection is only ever carried out as a last resort after a painstaking 14-step process and multiple attempts being made to resolve the issue with the customer - we never disconnect vulnerable customers."

In addition, he added, the number of customers on the firm's First Steps Programme tariff - which offers debt relief, energy efficiency advice and benefit entitlement checks - was set to double in 2008.

Competition

British Gas, the UK's biggest power provider, announced it would increase the amount it charges for gas and electricity by 15%.

The move followed increases by Npower, which raised its electricity prices by 12.7% and gas by 17.2%, and EDF Energy, which put up its electricity tariffs by 7.9% and gas bills by 12.9%.

All three suppliers blamed soaring wholesale energy prices.

Ofgem has rejected calls for it to launch an enquiry after accusations of price-fixing.

Chief executive Alistair Buchanan told the Chancellor, Alistair Darling, that he believed the UK energy market was competitive.

However, in an interview with the BBC, he invited anyone with evidence that energy firms had conspired to raise prices to submit the information immediately.



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