Putting people before profits? That's exactly what we're doing

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Putting people before profits? That’s exactly what we’re doing

We’re all familiar with the headlines that claim energy companies are making huge profits at the expense of their customers. Speaking recently even the Prime Minister said he wants to see energy firms “putting people before profits”.

I would argue, however, that this is exactly what we do. In the past six years RWE, the Group behind the npower brand, have invested millions of pounds a year in Britain: in new power stations, in improving energy efficiency, and in social schemes to help our most disadvantaged customers. A 2012 Report by Bloomberg for Greenpeace stated:

“RWE npower has been by far the biggest spender in the UK power market since 2006… It has built over 2.5 times the new capacity of any of its Big 6 peers… 60% of investment going into renewables.”

We’re proud to have invested more into Britain than any other major energy firm in recent years, and it’s this type of investment that creates highly skilled, well paid jobs across the country, powers the UK’s economy, and keep our homes warm and our businesses running. 

RWE npower pays up front the billions of pounds its costs to build new power stations to secure an affordable future energy supply. That money comes from our profits, from our shareholders, and the institutions that lend us money, such as pension funds and other major investors. They invest in us because they expect that we will make a sufficient profit to provide a fair and steady return on their investment over many years.  Put simply, without profit, we would not be able to deliver the much needed investments that Britain needs in new, clean energy, or indeed, fund the delivery of Government energy policy.

We’re well aware, however, that many households are concerned about rising energy costs, and we’re committed to providing the best price that we can for customers. Many of the costs on a bill we can’t control, such as wholesale energy costs and funding for Government emission reduction schemes, but we can control our own operating costs. 

Today, we’ve announced our financial results for 2012 and our business performance has improved compared to 2011. However, our domestic supply business – the business of supplying households with electricity and gas – made a loss for each of the three years before 2012.

The profit margin for our retail and generation activities we’ve announced is only 5%. That’s about the same that many supermarkets make on your weekly shop, and much lower than the profit margin the majority of FTSE businesses make. Most importantly, it’s a far cry from the huge profits that people and politicians believe we make. 

As well as making sure we keep our profits at an appropriate level, we’re helping customers to take control of their energy costs through energy efficiency improvements.

We’re also working hard to give our customers the best service. Last year we invested over £70 million in our retail business in order to improve customer service operations. We’ve also restructured our business to allow us to focus on our customers. It’s an area I want us to excel in, and we’ll continue to invest in it until we’re number one for customer experience.

So, yes, we must make a profit, but people, as well as profits, will always be a central part of how we do business.

 Paul Massara

CEO, RWE npower

Comments on this article (8)

Mr L Tippey | commented on 09.03.13

What a load rubbish you are talking putting customers first . I have just had my bill for the winter period and will have to borrow money to pay the bill, we have been very careful with the heating We do not have the heating on during the night and as little as possible during the day yet I have received probably are largest bill ever during the winter period. I have had A rated windows fitted, loft insulated, cavity insulation, this has not made any difference at all. The sooner all utilities are re nationalised and all profits go to help build new power stations the the better. I Will never recoup my out lay for all the work I have done trying to make my home more efficient has we can,t keep up with the price rises . This weekend we will not be having the heating on to save on future bills as the heating is are second biggest item to pay for over the year and to which we have no control off other than to turn the heating off .

    Paul Massarra | commented on 12.03.13

    Mr Tippey,

    Thank you for taking the time to read - and respond to - this blog. I'd like to personally respond to the points you have made.

    I'm acutely aware that many households are concerned about rising energy costs and other utilities. The sad fact is that all our costs are rising and these are having a direct impact on energy bills. Less than half of your bill (43%) is made up of actual wholesale energy costs and 23% covers network and distribution costs. More than 16% is associated with Government costs including renewables support, energy efficiency schemes, social programmes etc, while just 12% covers our operating costs.

    Many people believe that energy companies make far too much profit but our own profits amount to less than 5% - around the same you'd expect to see from other essentials, like supermarkets. While our profit last year was £390m, we have invested £4.5bn in the last five years to secure future energy supplies, help our most vulnerable customers and improve energy efficiency.

    For example, we have invested £650m in a new gas fired power station in Staythorpe, Nottinghamshire and £1bn in another plant at Pembroke, South Wales. Last year, we also spent over £32m to help our most vulnerable customers through our Spreading Warmth and Health Through Warmth programmes and and the Government Warm Homes Discount scheme.

    Although you may not feel as if it's making a difference, it's definitely a good thing that you've made your home as energy efficient as possible as this will help, especially as prices continue to rise. If you're worried about your bills, we may be able to help, for example you might be eligible for a special tariff - have a look at this website. Or you could call our Spreading Warmth Team on 0208 172 6999.

    Once again, thanks for taking the time to respond to this blog - we appreciate all feedback.

    Paul Massarra

Emily Wilson | commented on 10.04.13

Mr Massarra You are not putting people before profit. I have been trying to get my credit on a closed account refunded since December 2012. I cannot afford for your company to keep this money that I need to pay my utility bills with. Even with low interest rates if your company does this to enough people you can improve your profit margins. Do you feel that 4 months and still counting is a reasonable time frame to resolve this matter? Mrs Wilson

    emily | commented on 11.04.13

    Hi Mrs Wilson, Thanks for your comment, we're sorry to hear that you've had trouble with your refund. Please could you send us your account number or postcode to npowerblog@npower.com and we'll take a look into this for you. Many thanks Emily

Kati Teague | commented on 25.04.13

What a lot of rubbish you people at npower write. You don't give a damn about your customers. You have been at the bottom of the pile for customer satisfaction for years and all you do is pay lip service to that fact but do absolutely nothing to address it. Yesterday I again found out that npower have increased my Direct Debit without telling me. It has gone from £41/month to £55/month despite my account being in credit for £220 since February. The Direct Debit Guarantee in this country states I am entitled to 10 days notice of any increase and when I phoned npower customer service I was told this was not the case if I have paperless billing. This is the third time npower has kept my credit until I hassled to get it back. You couldn't make it up if you tried. Yes you have sat on this credit since February - what about the repayment of credit of over £60 within 10 days that npower claims it does? No, you really do not care about customers, only about ripping us off at every opportunity because the fines levied against you are worth the profits you make from overcharging customers. Well I for one have had enough and will be switching providers. Even if I don't get a cheaper deal, I can at least get better customer service.

    emily | commented on 26.04.13

    Hi Kati, I'm really sorry to read about the problems you've been having with your Direct Debit - this is obviously not the level of service we expect, but we're listening to all our customers and want to act on what you tell us. We've just invested in a new billing system, which will improve the way we service our customers. I'd really like to get this sorted for you and if you could email me your details - account number or address - to npowerblog@npower.com we will look into this for you. Many thanks Matt

      emily | commented on 30.04.13

      Hi Kati, I understand that you've spoken to one of our complaint advisors about this now, but do please let us know if there's anything else we can do. Many thanks Emily

Kati Teague | commented on 11.05.13

Too little, too late. I am now in the process of switching providers. Npower just spouts words to pacify but actually does nothing. For your customer service staff to tell me thet they don't have to give me 10 days notice before increasing my direct debit because I have paperless billing is a lie and contrary to the Direct Debit Guarantee regulations. I am contacting OFGEM and the OFT to see what they say about this.

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