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MPs call for energy industry transparency


The energy industry is once again under scrutiny from MPs, after insights into the amount of profit the ‘big six’ energy providers are making.

All of the big six providers, which include E.ON, Npower, British Gas, EDF, Scottish Power and SSE, hiked their prices at the end of 2012, blaming tougher, more competitive market conditions. However, the Energy and Climate Change Committee (ECCC) have filed a report claiming that energy watchdog, Ofgem, is not doing enough to ensure that profits posted by energy companies are transparent.

The ECCC claims that Ofgem is “failing consumers by not taking all possible steps to improve openness”, and that “working out exactly how their profits are made requires forensic accountants”.

With the prices of energy set to rise again, the ECCC is concerned that energy companies may be exploiting consumers and actually making larger profits than are being published. Ofgem has been accused of using a “relatively light approach” when reviewing how energy companies report their profits.

Committee member, John Robertson, said: “Ofgem needs to use its teeth a bit more and force energy companies to do everything they can to prove that they are squeaky clean when it comes to making and reporting their profits”.

Many low-income families have struggled with fuel poverty since the recession started in 2008, and trust in the energy industry has fallen after mis-selling scandals and huge profits at power firms were both reported in the last twelve months.

Ofgem, however, has responded to criticism by emphasising their commitment to consumers. Rachel Fletcher, Ofgem’s senior partner for markets said: “We share the committees’ goal of restoring consumers’ trust. This aim underpins out reforms which seek to get energy companies to deal with consumers in a simple, clear and fair way”.

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