David Prosser: When to hold Centrica to account

Outlook Let's be honest: British Gas is a deliciously easy target. Who are your sympathies with on hearing about a company making record profits during a period when many of the most vulnerable people in society have struggled to afford to keep themselves warm? Particularly if you take a look at the

company's profit margins, which have been running at record levels.

Still, the timing of Centrica's annual results yesterday was fortunate in one sense. The company made its announcement less than 24 hours after Chris Huhne gave the first of what he said would be annual energy policy statements. The subtext of the Energy minister's speech was crystal clear: the huge cost of upgrading Britain's creaking energy infrastructure while striving to hit our carbon targets will have to be met, for the most part, by the private sector.

Now, just as it's a simple matter to paint Centrica as profiteers unmoved by the prospect of shivering pensioners, it would be trite to say the company needs to make every penny it does in order to pay for infrastructure upgrades. The complicated interplay between public policy, regulator, company and consumer is, as ever, a little more nuanced.

However, last week, we heard from Neil Woodford, one of the City's most influential money managers, who warned he isn't likely to continue investing in the energy sector if the returns on offer do not improve. Ofgem, the regulator, has to its great credit become much more consumerist over the past two years, but it too has made it clear that customers will have to contribute to the cost of closing the energy gap.

British Gas's profits may be too high, though its dividend policy has not been to simply hand over all that filthy lucre to shareholders. The test for the company, however, is not to be found in its current margins but in the investments it makes over the decade ahead and the extent to which it further taps customers to pay for them.