13 February 2013

Energy Suppliers Profits up by 70%

The effects of the energy price rises are being felt with net margins for energy companies increasing from £50 to £85 per dual fuel customer..

Figures released today by Ofgem the energy regulator, show that the rolling average net margin for energy companies has increased by 70% over this time last year. Their latest calculations show the average profit margin for a dual fuel customer account is approximately £85, up from £50 per customer last February.

The rolling net margin figures are based on the average of estimates of the last 6 months, current month and 6 months into the future. They also publish an indicative net margin for the next 12 months to January 2014 are even higher at £115 per dual fuel customer as the full effects of the recent price rises are felt.

The figures have factored in future energy prices but have assumed that their estimate of costs for the CERT/CESP environmental programmes are incurred evenly over the period of the obligation and Ofgem comment:

"There is anecdotal evidence that recent costs of delivering these obligations have increased, which may at least in part be due to suppliers needing to deliver a disproportionate share of measures in later years. If this is the case, this is not reflected in our estimates.”

So big six, there's your excuse nicely lined up…

Source: Ofgem

One interesting factor behind the calculations is that Ofgem do not take into account discounted and fixed price tariffs saying they're carrying out the analysis from the perspective of a typical customer and the typical customer remains on the standard tariff.

Our recommendation is not to be a typical customer because savings of over £200pa are achievable by switching!