Energy companies' profits rise tenfold in six years
The big six energy companies saw their profits rise by 1,000% between 2007 and 2013, the competition watchdog has found.
According to a new analysis by the Competition and Markets Authority, they made more than £1.1 billion between them in 2013 from their domestic electricity supply business, up from just £110 million six years earlier.
That works out at a profit of £23.71 per household in 2013. And where households were buying gas from the same supplier, they made even more: 48.16 per household.
The big six - British Gas, SSE, Scottish Power, EDF Energy, E.On and Npower - supply to over 90% of homes and generate 70% of the UK's power.
Over the last year, wholesale energy prices have fallen by an average of 20%. However, the big six have cut gas bills by less than 5%, and electricity bills haven't been cut at all.
Which? has estimated that the companies ought to be able to cut gas bills by 8-10% and electricity bills by 10%, saving customers an average of £100 for the year.
Labour has pledged to freeze energy prices until 2017 if it wins the next election.
"We will stand up to the big energy companies. We will go ahead with our price freeze. We will reset this broken energy market for the long term so that proper competition and regulation can ensure fair prices are charged in the future," said Labour leader Ed Miliband last week.
"And we will go still further. We will pass a law to ensure falling costs are passed on to the consumer this winter; a law giving the regulator a legal duty to ensure fair prices this winter; a law giving the regulator the power to cut prices and keep homes warmer this winter."
The Competition and Markets Authority investigation was launched to discover whether the energy companies were making excessive profits from their customers, and plans to release its full findings after the election.
In this new analysis, it observes that most of the big six are making much higher margins from households on standard variable tariffs than those on fixed price deals - something it says may be hard to justify.
Specific profit figures for the big six are included in the report, but haven't been released. However, an Ofgem report released last year showed that British Gas was making the greatest profits, while EDF was running at a loss.
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