Energy Secretary wants gas profits to be investigated

jobdone1 wrote: »

Investigation after investigation after investigation followed by a damp squib nothing changes apart from greater increases month on month year on year yawn.

Ofgem doesn't want to understand the needs of customers only the needs of the energy industry. It refuses to exercise the powers it has until it is embarrassed into doing something. Then it will take for ever to do it.

Look at the dog's breakfast it served up as the Retail Market Review after two years or more of congratulating itself for taking its time. A two year review could not have served up so little for the consumer without a great deal of concerted effort.

Labour say they will abolish Ofgem - then, no doubt, shuffle the deckchairs under a new name where it will carry on doing the minimum as before. Nice work if you can get it. The FCA (formerly, FSA) is probably the model they will use. That doesn't work superbly.

What a joke.

First of all, it shouldn't be a huge surprise that there's not more competition in the utilities sector, at least in terms of pricing.

All the companies are selling the same product, that they buy from the same supplier. It isn't rocket science that prices are not going to vary much, they are subject to largely the same costs, ie distribution and taxes, the only area where they can make a bit of a difference is economies of scale (which clearly isn't working as BG are usually not the cheapest) and cost per customer in terms of service, infrastructure etc.

The different here is about £60 a year per customer between the cheapest (I belive it's EDF) and the most expensive - nPower.

I would like them to investigate how much money the "Big 6" are making from the generation side of the business though as that is certainly not clear. They don't *appear* to be making unfair profits from the domestic market (5% or so seems reasonable) but the generation side of it may well be a different story.

As for "forcing" them to invest the profits back into the business, what would they be reinvesting in? How much of the profit to reinvest etc.

He claimed gas made up two-thirds of energy bills, and that if profit margins for gas came down to a similar level to those in the electricity market, it could save every household £40 per year.

£40. Is that it? You'd save more by knocking VAT off the fuel.

He said there was evidence the company had tended "to charge one of the highest prices over the past three years, and has been on average the most profitable".

Er, duh!

This asks more questions than it answers, sort the banks out first I suggest.