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In recent years, npower has become a household name following its sponsorship of test match cricket, TV adverts and deals to supply the Millennium Stadium and Wembley Stadium with 100% renewable energy. With six million domestic customers and half a million business customers, it is one of the three biggest suppliers of gas and electricity in the UK. In terms of promoting a brand image, npower has been very successful, but what about the products and services that underlie this exterior image? Well, here too npower appears to be doing quite well. In November of last year a study by research firm JD Power ranked npower in second place in terms of gas customer satisfaction and first place in terms of electricity customer satisfaction. The research firm measured ‘satisfaction’ by asking interviewees for their experiences under their existing supplier on issues such as value for money, customer service, billing and payment. One of the reasons for npower's success is its strong ability to attract new customers. The well-known brand is backed up by a tariff called 'Sign Online' whereby new customers joining npower will pay less for their gas and electricity than existing customers. In fact, at the beginning of this month npower reduced prices for their Sign Online tariff by 7.4% for gas and 3.9% for electricity. If you're an existing customer you may justifiably feel aggrieved by this, but if you're not then it could be worthwhile switching to take advantage of the offer. This price reduction by npower is the first for quite some time. It follows years of energy providers increasing their prices because, as they quite rightly say, the cost for them to purchase gas and electricity has increased dramatically. However, wholesale gas prices began to fall during the middle of last year and many consumers are now left wondering why they haven’t benefited sooner and why price reductions haven’t been more dramatic this time round. The answer is that energy providers make their purchases in advance in the form of a forward contract. Essentially all that means is they agree a price for the commodities they want and then take delivery around nine months later. Hence, the gas and electricity you’re consuming today will have been purchased by your provider when prices were still very high. Not everyone is overly happy with that explanation, mainly because they don’t know what’s going on and are left having to trust their energy provider. Maybe the provider is keeping prices high citing the way these complicated markets work when really they are buying at the new lower prices and not passing the benefit on to customers. In response to growing customer frustration, npower has launched a new tariff that tracks the wholesale gas price directly. An index of wholesale prices is analysed on a quarterly basis and any movements in this index will be reflected in your bill. If price isn’t the only thing that matters to you then you could be interested in switching to a more environmentally friendly tariff. Whilst you may end up paying more by switching, you will be contributing in the effort to reduce the amount of carbon dioxide we produce. Currently both npower and Powergen offer green tariffs whereby they will match every unit of electricity you buy with a unit generated from a renewable source. In addition, for every customer on its green tariff, npower invests £10 per year into generating new methods of producing renewable energy. In our opinion, npower appears to be offering a good range of products and, as the JD Power survey revealed, customer satisfaction levels are high. Npower customer services offer you a choice of online energy management tools to assist you manage your energy consumption better. One thing I would say is npower are playing a risky game by offering a cheaper tariff for new customers because it could appear to existing customers that they are being punished rather than rewarded for their loyalty. But, I am impressed by their new tracker tariff that could remove a lot of the mystery surrounding the timing of changes to the amount customers pay. I’d also say that out of the main energy providers npower does the most to help the environment - a strong plus point in our ratings.
Staff editor, Gas & Electricity Section, February 2007 |
