Energy News

Energy firms make £105 profit per customer

Tuesday, 23 February 2010

By Daniel Barnes- daniel@consumerchoices.co.uk

You could save money by switching energy firms, as profits boom at energy firms.

Energy companies are making £105 profit per customer, as wholesale energy prices are dropping but household bills are not.

Data from the regulator Ofgem show gas and electricity companies’ profits per customer have risen from £75 in November to £105 in February.

So far only British Gas has cut its prices, by an average of 7%, and Ofgem is now pushing energy firms to follow suit and pushing customers to seek out the best deals.

The difference between the best and worst standard tariff energy packages is now around £100 a year – and greater savings can be made for customers on non-standard tariff deals.

The greatest gas and electricity savings can come from looking at the wide range of discounted online rates and fixed tariffs, the regulator stated.

However, energy firms have hit out at the figures claiming their profit margins are smaller and stating only half of customers’ energy bills are from the fuel itself, the rest covering distribution as well as social and environmental programmes.

Energy UK, which represents the “big six” energy firms claims the average annual profit for firms from a dual fuel customer is just £31.

Christine McGourty, director of Energy UK, said: “The business of supplying energy to the home moved into profit last year, but admittedly this came after three years in which the companies were earning close to nothing from supplying dual fuel customers.”

She added Ofgem’s claims of profits being at a five-year high come after years of slim profits and sometimes losses.

Chris Eagle, commercial manager at Energychoices.co.uk, said: “Energy companies and Ofgem may battle over the scale of profits, but all customers are interested in is getting the best deals.

“If gas and electricity providers’ profits are slimmest on dual fuel energy customers, then that is where customers ought to head. Signing up to an online deal and paying by direct debit can help cut your bills.”