Greedy Power companies to be investigated

Butterfly_Brain

Ofgem is to investigate recent energy price rises as it said they have significantly widened suppliers' profit margins.
The watchdog said that the net profit margin of £65 per typical customer in September was now £90, a 38% rise.
The calculations take into account price rises announced by three of the "big six" suppliers in recent weeks.
Ofgem will now review the domestic energy market to see if more action is needed to protect consumers.
A previous investigation of the market in October 2008 found no evidence of anti-competitive behaviour in the sector.
Review
The work will be completed by March 2011, and will study the "effectiveness of the retail market".
The regulator said it was asking if "companies are playing it straight with consumers" after the latest figures showed a 38% rise in profit margins from the typical dual-fuel customer in the last three months.
"The energy retail market can only be fully effective if consumers have confidence that the market is transparent and easy to take part in," said Ofgem chief executive Alistair Buchanan.
"So we will go beyond our usual quarterly reports on prices and do a comprehensive review of the retail market and our recent reforms from the consumers' perspective.
"Greater transparency in the market is good for consumers, investors and for the energy industry as a whole."
Last week Scottish Power said its customers' electricity bills would rise by an average of 8.9% while prices for gas customers would increase by an average of 2%.
This came after Scottish and Southern Energy said it would put up its domestic gas tariffs by 9.4% at the start of December.
British Gas customers also face a 7% rise in gas and electricity bills this winter.

About time too! But I doubt that Ofgem has the clout to sort out foreign owned companies

brewerdave

EXACTLY - another fudge by OFGEM coming up !!!!!

dogshome

Don't hold your breath folks, we've been here before
The last time Ofgem asked questions when wholesale prices fell, the Industry said ..... " We have to buy on Forward Contracts which were fixed at the old higher prices".

So Ofgem said "Show us these contracts", the Industry said "NO" and Ofgem did not have the authority to make them.

MillicentBystander

LOL. I bet the energy companies are quaking in their Kurt Geiger boots. Not. Let's not forget OFGEM is the 'regulatory' body who 'investigated' npower over the absolutely disgraceful gas sculpting scandal..and ordered them to pay back 2 million pounds to its customers. ConsumerFocus took up the case as it wasn't happy with the verdict. result? npower now has agreed to pay SEVENTY MILLION pounds back to its customers.

Question: of these 2 'regulatory' bodies, which one is surviving the Condems axeing of many quangos? Answers on a postcard to the well known anagram Click Negg (soon to be a member of the Tory party) c/o Sellout House, London.

JS477

OFGEM are useless and are too close to the companies so I'm not expecting anything positive for the customer to come out of this so called "investigation".

Cardew

http://www.bbc.co.uk/news/business-11842686

Dave_save

Does OFGEM actually know what these energy companies are paying for wholesale supplies? They might know what the general market prices are but if energy companies don't disclose the actual agreements with wholesalers, any investigation is worthless.

penrhyn

Energy companies are in business to make money for their share holders, not to provide the proletariat with cheap gas and electricity.:D

Cardew

Dave_save wrote: »

Does OFGEM actually know what these energy companies are paying for wholesale supplies? They might know what the general market prices are but if energy companies don't disclose the actual agreements with wholesalers, any investigation is worthless.

This is an interesting article on the complexities of buying energy.

http://www.bbc.co.uk/news/business-11767544

The bottom line is how much profit the companies. If the reports are to be believed is that they are in line to make £90 a year from a dual fuel customer.

Ofgem says the average margin on a standard dual-fuel tariff (where you buy gas and electricity from the same firm) had risen from £65 to £90 since September and it wants to ensure providers are not boosting profits at the expense of the consumer.

I wonder who else but customers 'boost profits'!

Ken68

Doubt Ofgem will make anything stick this time. The tariff costs have got to be all over the place, what with Smart Metering and FITS and soon to be RHI.

C_Mababejive

Am i the only one who doesnt think energy companies are greedy?

The UK has the most fiercely competitive and cheapest fuel costs in Europe and maybe the rest of the world for the prices of gas and electric.

Consider yourselves lucky.