Utility fatcats set to rake in extra profits
Energy fat cats look set to pounce on your household budget - again. Ofgem estimates UK energy firms could, in some cases, almost double their profits to £120 per dual fuel account.
That sum is more than 900% higher compared with the £10 take energy companies took in 2009 and almost twice that of Ofgem's original estimate - £56 - of a year ago.
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Wholesale prices have dived sharply in the last year though few of these savings - if any - have been passed onto consumers. Ofgem's claims though have sparked a bitter row with the energy firms. The suppliers' trade body Energy UK has thrown a tantrum on Ofgem's figures, claiming they're wrong.
"We call upon Ofgem," says Energy UK, "to only use accurate figures, to stop issuing estimates which are so often misunderstood, misinterpreted and can also be misleading. They need to play their part in explaining to the public what goes into their gas and electricity bills."
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In response, an Ofgem spokesperson told AOL Money they were one of the few organisations "that give a forward looking view of energy suppliers costs, revenues and pre-tax margins are likely to be. This [Ofgem figures] is not intended to represent the profits of individual suppliers."
Perhaps not but these profits have certainly been on an upward trajectory for several years; price hikes have seen margins climb substantially in some cases.
The latest indicators show that the average dual fuel bill from August 2014 to August 2015 will be £1330. The portion of the dual fuel bill made up by suppliers' wholesale costs is £598.
Then, network, environmental and social costs make up £386 of the bill while supplier operating costs for the next 12 months are, says Ofgem, projected to be £174.
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Meanwhile Labour says they will revoke licence suppliers if energy suppliers are found to be ripping consumers off, putting in place a new industry regulator. So far Ofgem has more than 15 investigations going on currently examining possible bad industry practice.
Still, around 2m people have switched to smaller energy providers since midsummer last year. Recently nPower admitted it had seen more than 60,000 customers leave in the first half of the year. British Gas and SSE have also seen customers voting with their feet.
Which? have reviewed several smaller energy providers. Ecotricity, Good Energy, Utility Warehouse, Ebico and Ovo Energy all took high scores overall.
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