Thursday, 8 December 2011

Big six energy firms face fresh accusations of profiteering

The big six energy companies have been repeatedly taking advantage of brief spikes in the wholesale price of electricity to pass on much longer-term increases to householders, new analysis for the Guardian shows.

The revelations of potential profiteering over many years were described as appalling by one MP and come amid mounting political pressure for a competition inquiry into the energy sector.

Npower, British Gas and others have repeatedly denied claims of profiteering and have blamed "green taxes" for increasing costs. But new calculations by statisticians at Manchester University show a widening gap between wholesale and retail prices, even before the last couple of months when domestic bills have soared and yet wholesale prices have slumped.
"There is a clear trend and this shows a widening gap between the price consumers pay and the wholesale cost paid by the energy companies," said Dr Nathan Green, a statistician at the university.

The Guardian obtained data on retail prices paid by consumers for their electricity and compared it with a composite measure of wholesale prices paid by electricity companies, generated by information specialist Mintec. This data shows retail prices, even excluding the impact of the relatively new climate change levy, increasing at a faster rate than wholesale electricity prices.

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