Ofgem defends profit estimates as it pressures firms to cut prices
I don’t care if Ofgem got its sums wrong by 50 or 100% in the context of rural fuel poverty they are definitely onto something in keeping the pressure on not just the big 6 but energy companies more generally. I have also recently being talking to a number of different organisations involved at the community level in micro-energy generation – does anyone know if they have their own network?
Energy regulator Ofgem has defended controversial estimates suggesting company profit margins have doubled – despite admitting it had drastically revised previous estimates because they were inaccurate.
The regulator piled pressure on the Big Six to cut prices on Wednesday, citing its analysis that the estimated margin before tax for a large supplier over the next 12 months has risen to £106 per household.
That is an increase from £101 last month, £53 a year ago and just £28 in January 2013, data published on Ofgem’s website suggests.
Dermot Nolan, the regulator’s chief executive, said the widening margins showed there was “scope” to cut prices. “That margin should be eroded by competition and if its not… then there is something wrong,” he said.
But the figures prompted a furious response from energy industry body EnergyUK, whose chief executive Angela Knight described them as “inaccurate”.