£105 profit a customer – energy companies on the make

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Almost 10p in every pound of a gas or electricity bill is now going directly into the coffers of the privatised energy companies.

Gas and electric companies are now making £105 a year profit from every customer – a 40 per cent increase in annual profits over the last three months.

The shocking figures revealed yesterday come just days before British Gas is expected to unveil a ‘bumper’ set of profits that could surpass the £571 million record profits in 2007, aided by a strong demand for gas during the cold weather.

Despite a seven per cent cut in its prices, consumer groups said they were very concerned that British Gas, and the other privateers, weren’t passing on the reduction in wholesale gas and electricity prices to the millions of ordinary people who are struggling to heat their homes.

Experts believe the money now being made is the most the energy companies have made since they were fully deregulated by the Tories at the end of the 1990s.

At the same time, there are warnings that, without state intervention, there will inevitably be power cuts in Britain.

Mike O’Connor, chief executive of Consumer Focus, said: ‘At a time when householders are worried about their winter energy bills, they will no doubt wonder why margins have increased for the fifth quarter in a row, while wholesale costs continue to fall.

‘The answer seems to be depressingly simple – energy companies are pushing up their profits by cashing in on the cold spell.’

This winter has been the coldest for 30 years, according to the Met Office, forcing people to use more gas and electricity to keep their homes warm.

But there are also fears that many elderly and vulnerable people are literally freezing to death because they can’t afford to heat their homes.

Ofgem said the average combined gas and electricity bill for a household is now £1,130 a year.

Britain faces power cuts over the next decade without state intervention Ofgem also warned.

It said there were serious doubts that the current deregulated system would generate enough power by 2020.

Industrial users were cut off last month as the national grid conserved supplies for homes during heavy snow.

Ofgem said: ‘The unprecedented combination of global financial crisis, tough environmental targets, increasing gas import dependency and the closure of ageing power stations has combined to cast reasonable doubt over whether the current energy arrangements will deliver secure and sustainable energy supplies.’

Ofgem chief executive, Alistair Buchanan, said there was a consensus ‘that leaving the present system of market arrangements unchanged is not an option.’

There is no doubt that the gas and electricity industries need to be renationalised.