Big Six energy firms ‘making six times more profit than they say’
- Credit: PA
Energy firms have been accused of making more profit than they say, following an investigation into companies' finances.
Suppliers are said to be overcharging families and making six times the profit they admit to publicly, according to a probe by the Sun newspaper.
The allegations are based on a report commissioned by Energy UK, which represents power firms, by accountancy firm PWC.
The newspaper said it obtained an original copy of the report which is said to show that the cost of supplying a home with gas and electricity 'falls well below' what families pay with the Big Six energy firms.
It reportedly shows costs to suppliers - such as buying gas, running call centres and power lines- amount to £844 per year to provide fuel to one household in 2016.
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But the majority of families with the Big Six are on so-called standard variable tariffs - and are paying as much as £1,172 with some suppliers, the paper said.
This leaves a profit of £272 – a margin of 24% if VAT is removed, the paper worked out.
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Energy UK cites on its website calculations by industry regulator Ofgem that operating margins in 2015 were equal to around 4% of a bill.
But the paper accused Energy UK of cherry-picking parts of the report to put on their website which failed to include details of the profits.
Energy UK said it 'rejects completely any implication that the report was changed to alter the perception of supplier profit'.
A spokesman said: 'The report used the publicly available consolidated segmental accounts of major energy suppliers which are provided to the regulator, Ofgem. These accounts show average profits of 4% and that figure appears on the Energy UK website.
'The purpose of the report is simply to help understand how the different pressures on an average bill have changed over recent years. It was not intended to present, or to hide, how much profit different firms make across their various tariffs.'
It was 'never intended to provide a commentary- positive or otherwise - on energy supplier margins', it added.
Business Secretary Greg Clark said he would be calling Energy UK to a meeting to discuss the findings.
'This report appears to confirm my concern that the big energy firms are punishing their customers' loyalty rather than respecting it,' he said.
'Customers who are loyal to their energy supplier should be treated well, not taken for a ride, and it's high time the big companies recognised this.
'I have made clear to the big firms that this can't go on and they must treat customers properly or be made to do so.'