Simon Read: The big energy firms should try looking in the mirror

 

The energy companies and the industry watchdog, Ofgem, have been going at each other hard this week in a spat that would not be out of place in a playground.

The regulator started it by publishing estimated future profit margins for the Big Six energy providers. According to Ofgem, the projected margin before tax for a typical large supplier over the next 12 months will be £106, up from £101.

The regulator also suggested that the energy company profit margin on household bills will be 8 per cent next year – a figure that has almost doubled in just 12 months.

That rightly created outrage, although not just from MPs and consumer groups, who quickly accused the Big Six of profiteering. It also provoked an angry response from the energy companies themselves, which branded Ofgem's figures unhelpful.

Angela Knight, who heads the industry mouthpiece Energy UK, said: "Using estimates as inaccurate as these, and which often result in misconceptions and misunderstandings, gets us nowhere."

Senior officials at British Gas were equally aggressive in their criticism of their figures, as was Dale Vince, the boss of smaller supplier Ecotricity, who said: "Ofgem's figures are utterly misleading. You wonder why it publishes them."

There is a simple answer to that. The watchdog publishes the estimates to give consumers an idea of just how much profit their gas and electricity suppliers are making.

The figures are part of the Supply Market Indicator (SMI), which was set up to help us understand what is likely to happen to the different costs that make up our bills in the next 12 months.

The figures are necessary because the energy companies still hide behind obfuscation rather than being honest and open about why they continue to rake in huge profits while more and more vulnerable people are forced to turn down their heating and suffer because they can't afford to pay the rising bills.

The watchdog accused the companies of not passing on the savings they're making through falling wholesale and environmental costs. Rather than moaning about "misleading" estimates, the companies should answer that key question.

s.read@independent.co.uk

Twitter: @simonnread

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Digital Optimisation Executive - Marketing

    £30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

    Recruitment Genius: Financial Reporting Manager

    £70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

    Recruitment Genius: Payments Operations Assistant

    £23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

    Recruitment Genius: Telephone Debt Negotiator

    £13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

    Day In a Page

    Sepp Blatter resignation: The beginning of Fifa's long road to reform?

    Does Blatter's departure mean Fifa will automatically clean up its act?

    Don't bet on it, says Tom Peck
    Charles Kennedy: The baby of the House who grew into a Lib Dem giant

    The baby of the House who grew into a Lib Dem giant

    Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
    Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

    The harrowing testament of a five-year-old victim of Syria's endless civil war

    Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
    The future of songwriting: How streaming is changing everything we know about making music

    The future of songwriting

    How streaming is changing everything we know about making music
    William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

    Recognition at last

    Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
    Beating obesity: The new pacemaker which helps over-eaters

    Beating obesity

    The new pacemaker which helps over-eaters
    9 best women's festival waterproofs

    Ready for rain: 9 best women's festival waterproofs

    These are the macs to keep your denim dry and your hair frizz-free(ish)
    On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

    On your feet!

    Spending half the day standing 'reduces risk of heart attacks and cancer'
    Liverpool close in on Milner signing

    Liverpool close in on Milner signing

    Reds baulk at Christian Benteke £32.5m release clause
    With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

    The big NHS question

    Why are there so few new GPs when so many want to study medicine?
    Big knickers are back: Thongs ain't what they used to be

    Thongs ain't what they used to be

    Big knickers are back
    Thurston Moore interview

    Thurston Moore interview

    On living in London, Sonic Youth and musical memoirs
    In full bloom

    In full bloom

    Floral print womenswear
    From leading man to Elephant Man, Bradley Cooper is terrific

    From leading man to Elephant Man

    Bradley Cooper is terrific
    In this the person to restore our trust in the banks?

    In this the person to restore our trust in the banks?

    Dame Colette Bowe - interview