Electricity profits 'excessive'

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The Independent Online
The electricity industry made excess profits of pounds 1.5bn last year, equivalent to pounds 60 for each customer, according to Frank Dobson, the Labour Party spokesman on energy. He called for an urgent change in the way the industry is regulated to cap the electricity companies' profits and prices, writes Mary Fagan.

Mr Dobson said profits in the industry, including generators, had increased by 150 per cent since 1987/88 to pounds 3.1bn, while inflation had risen by 31 per cent. The profit in a fair world would have been about pounds 1.6bn for the industry in total, he said.

At the same time, he added, electricity prices for the average domestic consumer had gone up by 40 per cent since 1986 when privatisation was announced.

He said: 'For monopoly suppliers of essential services there is no justification of increases higher than inflation. Water, gas and electricity companies alike do not charge prices, they levy a tax, because these services are vital and people cannot do without.'

He said the highest profit per customer was made by South Wales Electricity at pounds 79, followed by London Electricity at pounds 74, Manwen at pounds 73 and Yorkshire at pounds 72. Last year the regional supply companies raised domestic prices by an average of 10 per cent.

Mr Dobson said the companies were bad for the economy as they absorbed funds that could be put to good use elsewhere. He also said that the prices charged to businesses put them under threat.