Energy bills to soar despite reduced cost to utility companies

amcluesent

Consumer groups are in revolt over steep price hikes that will see households face near-record gas and electricity bills this winter, despite the fact that wholesale prices are only half the level of 2008.

Yet as the graph shows, wholesale gas prices collapsed in 2009 and have not risen to anywhere near their previous levels. Profits at the utility companies have, in the meantime, surged. Centrica, which operates British Gas, told City analysts this week that its profits were likely to be above expectations, hitting £2.2bn. Shareholders have enjoyed an 18% gain in the value of their holdings this year alone, with dividends on top.



Audrey Gallacher, head of energy at Consumer Focus, said: "Customers will be baffled as to why they are being told to pay more when British Gas is on track for huge profits. British Gas admits that high margins due to low wholesale costs have given a major boost to its balance sheet. So why, yet again, have customers seen only tiny price cuts when wholesale costs have been so low for so long, yet suppliers hike prices as soon as wholesale costs start to edge up."

FACT - Another rip-off!

grahamc2003

But your power bills these days have to pay for many more things than just the suppliers input costs and profits. Specifically, many 'green' measures, such as FITs, carbon trading, very high subsidies for wind farms (both for construction and operation), the renewables obligation, light bulb/insulation/draft proofing subsidies, and countless other 'green initiatives' are loaded onto comsumer bills (several years ago they would have been loaded onto general taxation, and not consumer bills). The cost of these many measures will rise quite quickly from now on for probably a decade, even if no more such measures are introduced. Even if eg gas prices drop, our power bills will still rise, the effect of the measures being a larger and larger component of out power bills. In addition, the industry will have the unavoidable cost of many more Nuclear stations over the coming decades.

If you think energy prices are high today, they'll be much higher in real terms over the coming years.

Cardew

BG's profits:

The strong first-half performance followed record operating profits of £595 million in 2009 - up from £376 million in 2008.

So in their record breaking year last year they made about £35 profit per account, up from £21 in 2008.

Shame on them - profit, disgusting etc etc

Tesco made £1,600million(£1.6 billion) profit in the 6 month period ending in Oct - so about 5 times the profit BG made.

point made?

Widelats

This tells me i need a wind turbine and solar panels, and any electric i sell back to the grid i will charge my own sky high prices, that will get some of my cash back.