Energy Advice Line welcomes Big Six probe into Profits
The Energy Advice Line has welcomed OFGEM’s order for an immediate enquiry into the profits and prices of the Big Six energy companies.
The Competition and Markets Authority (CMA) will now begin its “once and for all” probe as soon as possible and is expected to report back by the end of next year.
Julian Morgan, managing director of the price comparison, switching and advice service, said the regulator had acted correctly in instigating the investigation, as new figures showed that energy suppliers’ profits were continuing to rise.
“The announcement of this enquiry is very welcome,” Mr Morgan said. “There is widespread confusion about why energy suppliers cry poor and yet appear to be enjoying healthy profits.
“Consumers also want to know why their bills are rising while wholesale gas prices are falling. I hope this investigation will provide some much needed clarity.”
The enquiry, which OFGEM first proposed in March, will consider whether the Big Six – British Gas, SSE, Npower, EDF, Scottish Power and e·on – are making excessive profits.
New figures released by the regulator show that suppliers stand to make £101 before interest and tax from a typical bill over the next year, up from £96 last month and £48 a year ago.
The CMA will also investigate why suppliers “consistently” charge loyal customers higher prices, and whether they enjoy an unfair advantage by both generating energy and selling it on to consumers.
“This will be a fascinating enquiry and will finally shed light on whether the so-called competitive energy market is working properly,” Mr Morgan said.
“We have long argued that the Big Six effectively enjoy a monopoly in the energy market and as a result, consumers do not reap any benefit from competition.
“It could be that the big suppliers enjoy an unfair advantage over smaller independent energy companies because they are both suppliers and retailers.
“This could mean that the Big Six face being broken up into smaller organisations, and they will have to be prepared for that to happen.
“We will await the outcome of the enquiry with interest. In the meantime, we urge all consumers to be vigilant when it comes to their energy bills.
“It is still crucial for businesses and householders to keep up to date with what’s going on with energy prices, so they can be sure they are signed up to the best possible deal.
“Using an independent and respected price comparison and switching service like the Energy Advice Line makes this very easy.”
The Energy Advice Line is one of the UK’s leading price comparison and switching services for business and domestic energy customers. It is also an advocate for energy market reform and has campaigned for a better deal for energy users, including calling for a ban on cold calling and changes to regulations to make it easier for all consumers to switch suppliers.
The service is completely independent and free. Consumers can quickly and simply search the market for the best available energy deals from an extensive panel of small and large energy suppliers. The service also offers a free advice service for business energy customers throughout the to of their energy contracts.
For further information visit www.energyadviceline.org.uk