UK Utilities Under Spotlight Again on Prices

UK Business and Energy Secretary Greg Clark is to meet Energy UK, which represents supply firms, to discuss claims in a national newspaper that some suppliers are making a profit margin as high as 24% on certain customers - especially those who have never switched supplier.

Clark’s department confirmed to NGW that a meeting will be held between him and Energy UK to discuss the report in The Sun newspaper, but said it could not say when it would be held; his spokesman said the two meet regularly on a number of issues.

According to the BBC, The Sun is accused by Energy UK of cherry-picking parts of a report that it, Energy UK, had commissioned from PWC. Energy UK has insisted that average profits made on energy consumers are about 4%, the figure it has disclosed to energy regulator Ofgem.

Business and Energy Secretary Greg Clark (Photo credit: UK government)

But in a press statement, Clark said: “This report appears to confirm my concern that the big energy firms are punishing their customers' loyalty rather than respecting it. Customers who are loyal to their energy supplier should be treated well, not taken for a ride, and its 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. I want to look into the evidence the report contains and will ask Energy UK to meet with me to discuss its findings."

The Sun’s report characterised the suppliers implicated as “greedy.”

After an exhaustive two-year probe, the UK’s competition watchdog concluded five months ago that it was broadly satisfied with how the retail energy market was now working, although it ordered a number of new measures – one being that suppliers would have to give Ofgem details of customers who have been on the standard default tariffs for three years or more.

Mark Smedley