Energy Choices

Energy Choices

December 17, 2009 04:08 ET

Npower Launches Cheapest Energy Tariffs in UK but Beware of the Exit Fee

LONDON, UNITED KINGDOM--(Marketwire - Dec. 17, 2009) - Npower's brand new online energy tariffs have shot straight to the top of the best buy tables in 11 of the UK's 14 distribution areas.

Over the past two months, the UK's biggest energy companies have all launched cheap new tariffs, and Npower's two new online tariffs are the latest offerings but they come with a catch.

Customers of both the tariffs - Web 17 and Sign Online 17 – will have to pay exit fees if they leave the tariff before 31 March 2011. The fees are set at Pounds Sterling 20 per fuel and the Web 17 tariff is only available to new customers.

Chris Eagle, commercial manager at, said: "These new tariffs are particularly cheap at the moment, but there are other cheap deals around that don't charge an exit fee, so it is definitely worth your while to compare energy prices first.

"We can see why companies charge exit fees if they're going to cap their prices – if they can try to prevent customers from switching, they can afford to give better capped deals. But in this case, the customer doesn't benefit from being tied into their contract – they're getting good energy prices now, but that could all change in a few months' time."

"The fact that Npower is applying these fees to a variable-rate tariff could signal a worrying new trend."

Exit fees are usually included in capped or fixed tariffs, where the price of energy is set at a particular level until the exit date. But these two Npower tariffs offer no such guarantee: the energy prices offered are variable, which means they can rise during the contract period and customers will have to pay to leave if they find a cheaper deal elsewhere.

Those who sign up for these new tariffs will also have to manage their accounts online and pay by monthly Direct Debit, which is normal for an online tariff.

Customers who use an average amount of energy will find that these Npower tariffs are currently their cheapest option, unless their local electricity distributor is Northern Electric, Yorkshire Electricity, or East Midlands Electricity; in which case there will be other suppliers who can offer cheaper energy prices and a better deal.

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