Energy News

Energy firms making ‘historically high profits’

Tuesday, 8 December 2009

By Hazel Cottrell - hazel@consumerchoices.co.uk

Energy giants are making profits of £85 per household, but they claim they’re losing money.

Energy suppliers are making historically high profits on consumer bills, according to energy regulator Ofgem (www.ofgem.gov.uk), in its quarterly energy price report released yesterday.

Ofgem reported suppliers’ profit margins had increased sharply this year. Dual fuel and gas-only profits were up from £20 in February 2009 to £85 per customer now.

Meanwhile electricity-only profits are around £20 per customer, although the profit margin dipped as low at £5 per customer during the summer.

Robert Hammond, energy expert for consumer organisation Consumer Focus, said: “If energy firms will not do the right thing by their customers, it is time for an investigation into the industry by the Competition Commission.”

The “Big six” hit back yesterday, releasing their own report through their affiliate Energy UK. The energy suppliers claimed they are making scant profit from consumers. Their figures were annual profits per customer of £9 for electricity, £10 for gas and a loss of £1 for dual fuel customers.

Annual profit claims compared

Consumer Focus’ Hammond added: “Consumers who have only seen tiny cuts to their energy bills, while wholesale prices have plummeted, will find it laughable that the suppliers say they are making such miniscule profits.”

Chris Eagle, commercial manager at Energychoices.co.uk, said: “The average consumer has little faith in the UK energy industry as it is, and seeing organisations release conflicting reports like this will surely damage their trust.”