Ofgem: energy firms’ profits from customers up 77%

Energy watchdog Ofgem has said that suppliers’ profits rose by 77% last year to £53 per home, but energy giants have claimed these figures are “out of date“.

The watchdog announced the figures on Monday amid debates over green levies and wholesale costs, which energy firms say were a catalyst in their decisions to increase energy bills by as much as 10.4%.

Ofgem said, “There is some evidence of rising profit margins. This rise has been due to a combination of higher prices and volumes rather than lower cost”.

The new figures are expected to put greater pressure on energy companies to help customers out, but they were dismissed by one of the big six, RWE, which said that the figures were “already out of date”.

The energy companies responded to a grilling by MPs by mounting pressure on the government to take ‘green levies’ out of energy bills, instead placing them into general taxation. Co-operative Energy and EDF both announced price hikes and anticipated further increases if the government did not do so.

David Cameron was also heavily criticised after a senior Tory MP told the Sun that he had told Downing Street aides, “We have to get rid of all this green crap”. 

The decisions to raise the cost of energy bills have received widespread criticism by many, including former conservative prime minister Sir John Major, Labour leader Ed Miliband and the archbishop of Canterbury. When appearing before the committee of MPs, Labour MP Ian Lavery told them that there was a good case for the industry to be renationalised.

Further reading:

‘Dithering’ on green economy could cost UK billions, warns TUC

Protesters to target Npower HQ in demonstration against big six energy firms

Downing Street denies Cameron’s ‘green crap’ comments

Energy committee to PM: cutting green levies will ‘undermine investor confidence’

EDF hikes prices by 3.9% and vows to go higher if green levies review falls short