Is there a mod that adds birthsigns to NPCs?

not that i know of

Morrowind Code Patch has an optional patch which gives all the NPCs birthsign abilities. I haven't tried it but apparently it makes NPC very tough as they all have a free spell to use.

I'm not seeing that as an option in the documentation for MCP. Are you referring to this: "NPC AI casts zero cost powers. Allows NPCs to cast powers." ? I thought that only allowed them to cast powers they would normally have had in their list or a mod added to their list that cost zero, like racial powers. Many birthsigns are passive at least in part, and I don't think the birthsign powers show up in the list of spells available to npcs (nor should they because then they'd be able to use any one of them, not specific ones right?).

Too bad it looks like this doesn't exist. I always thought it strange that the hero of the story was the only person in the world that actually has powers from their birthsign.

That's my impression as well.

Since you can't specify an NPC's birthsign in the CS, you'd need to find some other way to give them birthsign effects. Unfortunately I don't think there's a good alternative. One could play around with custom races or items, but it'd be a lot of work (each NPC would have to be adjusted manually), wouldn't effect NPCs added by mods, and has a high risk of conflicting with other mods.

Oh, I think you might be right actually. My apologys.