Ofgem not happy with energy company profits

There seems to be little doubt in anyone’s mind that the ‘Big Six’ energy companies in the UK are making an awful lot of money these days.  In fact, the most recent reports from Ofgem made it quite specific:  currently the Big Six energy companies are all making about £125 in profit per customer per year.  As recently as June this year, that profit was £15.   Ofgem is also investigating company accounts and strategies, supposedly to insure that smaller providers are not forced out of the market.

Though Ofgem’s chief executive, Alistair Buchanan, said that there is “a need for a radical break with the past”, many observers are wondering why he seems to be just now noticing the steadily rising prices.  Labour leader Ed Miliband made several statements indicating that his party would crack down on greedy power companies, and said the companies should use that extra profit to “stop crippling price rises”.

The likelihood of the Big Six or any other company willingly giving up profits is rather far-fetched.  Granted, they do not have control over global energy prices, and the government’s ‘green’ initiatives have also contributed to some cost increases for the energy companies.  However, this is no comfort to hundreds of thousands of UK residents who are facing another long cold winter.

The green organisation ‘Friends of the Earth’ just published a report showing that average household energy costs could go up by £300 per year if the Big Six go forward with a reported plan for huge investments in gas-fired power stations.  Andy Atkins, ‘Friends’ executive director, said that the investments should instead be in sustainable energy and reduction of energy waste.

The general opinion seems to be that big oil and gas companies have a stranglehold on British consumers and on the price of fuel, and the government is going to have to finally step in on the side of the people instead of the powerful.  Government spokespersons are saying that’s their intent, but if something definitive isn’t done now, there may be a lot more deaths from hypothermia this winter.