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; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
Sport
Ronaldinho signs the t-shirt of a pitch invader
footballProof they are getting bolder
News
peopleStella McCartney apologises over controversial Instagram picture
News
William Hague
people... when he called Hague the county's greatest
Voices
voicesBy the man who has
News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
Arts and Entertainment
Ed Sheeran performs at his Amazon Front Row event on Tuesday 30 September
musicHe spotted PM at private gig
Sport
Arsene Wenger tried to sign Eden Hazard
footballAfter 18 years with Arsenal, here are 18 things he has still never done as the Gunners' manager
News
Floyd
newsFloyd 'Creeky' Creekmore still performed regularly to raise money for local hospitals
Extras
indybestKeep extra warm this year with our 10 best bedspreads
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
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

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    Day In a Page

    Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

    The children orphaned by Ebola...

    ... then rejected by surviving relatives over fear of infection
    Pride: Are censors pandering to homophobia?

    Are censors pandering to homophobia?

    US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
    The magic of roundabouts

    Lords of the rings

    Just who are the Roundabout Appreciation Society?
    Why do we like making lists?

    Notes to self: Why do we like making lists?

    Well it was good enough for Ancient Egyptians and Picasso...
    Hong Kong protests: A good time to open a new restaurant?

    A good time to open a new restaurant in Hong Kong?

    As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
    Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

    Paris Fashion Week

    Lagerfeld leads a feminist riot on 'Boulevard Chanel'
    Bruce Chatwin's Wales: One of the finest one-day walks in Britain

    Simon Calder discovers Bruce Chatwin's Wales

    One of the finest one-day walks you could hope for - in Britain
    10 best children's nightwear

    10 best children's nightwear

    Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
    Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

    Manchester City vs Roma

    Five things we learnt from City’s Champions League draw at the Etihad
    Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

    Trouble on the Tyne

    Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
    Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

    Isis an hour away from Baghdad -

    and with no sign of Iraq army being able to make a successful counter-attack
    Turner Prize 2014 is frustratingly timid

    Turner Prize 2014 is frustratingly timid

    The exhibition nods to rich and potentially brilliant ideas, but steps back
    Last chance to see: Half the world’s animals have disappeared over the last 40 years

    Last chance to see...

    The Earth’s animal wildlife population has halved in 40 years
    So here's why teenagers are always grumpy - and it's not what you think

    Truth behind teens' grumpiness

    Early school hours mess with their biological clocks
    Why can no one stop hackers putting celebrities' private photos online?

    Hacked photos: the third wave

    Why can no one stop hackers putting celebrities' private photos online?