Ofgem, the energy watchdog, is launching a renewed transparency drive over the finances of the big six energy suppliers amid further concerns of profiteering.
Figures released by Ofgem show the companies that dominate power generation and supply have had combined earnings before interest and tax of almost £17bn over the past five years.
It is demanding independent auditing of annual accounts – broken down into individual divisions – as well as the faster release of figures and more details on corporate cost structures.
Senior Ofgem officials said they could not dictate energy tariffs but expressed concern that a fall in wholesale gas and electricity prices over the summer was not passed on.
“What we are not seeing is any reduction in the standard tariff ... yet again that raises the question about whether there is competition in the market,” said Rachel Fletcher, senior partner at Ofgem’s market division.
She said this validated the decision to refer the six – E.ON, npower, Scottish Power, SSE, Centrica and EDF – to the Competition and Markets Authority.
Ofgem noted that annual profits per customer had risen from £8 in 2009 to £48 in 2013, slightly down on 2012. But the regulator’s wider “supply market indicator”, which calculates per-customer earnings on a rolling annual basis, predicts the big six are on track to earn £102 per customer over the next 12 months.
Fletcher denied Ofgem was unable to influence behaviour, saying it had acted robustly with its call for an investigation by the CMA, and believed its latest initiatives would help.
“Our proposed reforms are providing increased transparency on company profits. This is to inform public debate, encourage competition and to help suppliers rebuild customer trust.”
Ofgem’s latest review of 2013 accounts from the big six show profits from generation and supply reaching £2.8bn in 2013, down from £3.5bn in 2012 partly because of plant closures.
Some companies are making much more than others with Centrica, the owner of British Gas, securing profit margins from its gas supply business of just under 9%, double that of SSE in second place.
Ofgem asked for detailed information on how the big six buy and sell energy in the UK, but it failed to obtain full disclosure on E.ON, npower and EDF, which are all foreign-owned.
theguardian.com
Figures released by Ofgem show the companies that dominate power generation and supply have had combined earnings before interest and tax of almost £17bn over the past five years.
It is demanding independent auditing of annual accounts – broken down into individual divisions – as well as the faster release of figures and more details on corporate cost structures.
Senior Ofgem officials said they could not dictate energy tariffs but expressed concern that a fall in wholesale gas and electricity prices over the summer was not passed on.
“What we are not seeing is any reduction in the standard tariff ... yet again that raises the question about whether there is competition in the market,” said Rachel Fletcher, senior partner at Ofgem’s market division.
She said this validated the decision to refer the six – E.ON, npower, Scottish Power, SSE, Centrica and EDF – to the Competition and Markets Authority.
Ofgem noted that annual profits per customer had risen from £8 in 2009 to £48 in 2013, slightly down on 2012. But the regulator’s wider “supply market indicator”, which calculates per-customer earnings on a rolling annual basis, predicts the big six are on track to earn £102 per customer over the next 12 months.
Fletcher denied Ofgem was unable to influence behaviour, saying it had acted robustly with its call for an investigation by the CMA, and believed its latest initiatives would help.
“Our proposed reforms are providing increased transparency on company profits. This is to inform public debate, encourage competition and to help suppliers rebuild customer trust.”
Ofgem’s latest review of 2013 accounts from the big six show profits from generation and supply reaching £2.8bn in 2013, down from £3.5bn in 2012 partly because of plant closures.
Some companies are making much more than others with Centrica, the owner of British Gas, securing profit margins from its gas supply business of just under 9%, double that of SSE in second place.
Ofgem asked for detailed information on how the big six buy and sell energy in the UK, but it failed to obtain full disclosure on E.ON, npower and EDF, which are all foreign-owned.
theguardian.com
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