Energy giant pays price of bad year

Big Six energy giant Npower lost more than 350,000 customer accounts last year after an “extremely difficult” year of hefty financial losses and customer service failings.

The provider, owned by German energy group RWE, racked up annual losses of £99 million against profits of £183m in 2014.

It said customer gas and electricity accounts dropped by around 7%, or nearly 355,000, to 4.77 million.

Long-running problems with its IT billing system and poor complaints handling landed Npower with a £26m fine from regulator Ofgem in December.

But Npower said it was beginning to see improvements in its customer service, with complaints per 100,000 customers more than halving last year – with progress picking up towards the end of the year.

It insisted that by the fourth quarter, customer complaints were below the industry average.

The company previously wrote to customers apologising for the problems and pledging that no one would be left out of pocket as a result of billing failures.

The energy giant was also hit by intense competition in the energy sector, as well as falling demand as customers used less energy, or switched to non-standard tariffs.

RWE’s UK power station fleet narrowed losses to £55m last year, which it put down to more flexible power generation, cost savings and its move to offload its Fawley site in Hampshire.

But improvements were offset by sharply lower prices for electricity in the wholesale market.

Overall in the UK, Npower and the power generation business combined made a loss of £154m.

Paul Coffey, chief executive of RWE Npower, said: “The results continue the trend seen earlier in 2015, but they are nonetheless extremely disappointing and we are starting a two-year process to fix them.”

Overhauling the group would be a “huge task” and he insisted the job losses will “protect the thousands of jobs that will remain”.

The energy giant has faced difficult questions over last year’s results.