RWE UK unit to cut prepayment energy price premium

LONDON, Dec 3 (Reuters) - The UK unit of Germany's RWE AG (RWEG.DE) npower is to follow British Gas and reduce the premium customers on prepayment meters are charged for their gas and electricity compared to other payment methods.

Householders who pay for their energy using prepayment meters are charged more because of the higher costs associated with running them.

npower said on Wednesday the cut by 30 pounds ($44.21) per year in prepayment prices from Monday would bring the prices in line with standard quarterly cash-cheque power and gas tariff.

The move was made possible due to cost savings in running pay-as-you-go meters, it said.

Last week, British Gas, a unit of Centrica (CNA.L) announced a cut in the premium by about 22 pounds from Dec. 18.

In line with British Gas, npower also pointed to possible across-the-board price cuts.

"If we see a significant decrease in wholesale prices across the winter and this is sustained, then we will be keen to reduce our prices," said Kevin Miles, chief executive of npower retail.

"Wholesale prices have certainly begun to move downwards but wholesale gas is still nearly twice as expensive as it was two years ago," he was quoted as saying.

The company said it would cut charges by 20 pounds a year for customers in Yorkshire, the North East and West Midlands, who were not connected to mains gas grid.

Some energy suppliers charge prepaying customers hundreds of pounds more than those paying by direct debit, because of higher administration costs and utilities have warned that moves to cut profits from prepay meters could mean other bills rising. (Reporting by Nao Nakanishi)