The figures will put yet more pressure on the firms to explain why bills and UK profits have been going up, as they appear before a influential House of Commons committee of MPs.
According to Ofgem, Npower paid an average of £59.61 per megawatt-hour for electricity in 2010. The average wholesale price fell by 4% to £57.32 in 2011 and rose by less than 2% to £58.39 in 2012. The company increased retail prices by 5.1%, 7.2% and 9.1% respectively in those years.
Similarly, EDF paid wholesale prices for electricity supplied to households of £58.16MWh in 2010, falling by 0.6% to £57.82 in 2011 and rising less than 5% to £60.68 in 2012. In those years EDF's electricity prices to customers went up by 7.5%, 4.5% and 10.8% respectively.
Meanwhile E.ON paid £57.64MWh for its electricity in 2010, rising by 7% to £61.82 in 2011 and falling by 4% to £59.44 in 2012. It raised its power prices twice by a cumulative 20% in 2011, before cutting them by 6% in 2012.
Asked why wholesale prices appeared to be out of kilter with increases in bills, companies said network and environmental costs had been the biggest factor in higher electricity bills, which are now around £600 a year on average. However, figures from Ofgem indicate electricity network costs have only risen by £10 in each of the last four years, while green costs are rising by a similar amount. Green and social levies make up £112, or less than 9%, of the average household energy bill.
With four of the big six – British Gas, Npower, Scottish Power and SSE – announcing big price rises in the last few weeks, the companies are under increasing pressure to justify the increases, after figures from the energy regulator suggested the profit margin made by the companies per household has more than doubled from £45 to £95 over the last year. Ofgem said wholesale energy costs have gone up by just £10 in a year, while VAT, operating and other costs are up £40. The energy companies dispute this analysis and point to higher wholesale costs this winter.
Downing Street yesterday said energy companies should account for the latest round of price rises, which have averaged 9% this autumn. Energy bill increases are continuing to cause a headache for the coalition, as a new YouGov poll shows 68% of the public believes Labour's energy price feeze is workable.
Caroline Flint, shadow energy secretary, called on the companies to "come clean about why they are imposing yet another round of inflation-busting price rises this winter, when they are already making huge profits".
"Revelations about rising profits and the growing gap between wholesale costs and household energy bills highlight why answers are needed," she said. Which?, the consumer group, yesterday called on the chancellor to tackle rising bills. The group said it wants the companies broken up and an end to the "blank cheque" of allowing energy companies to charge customers whatever they like for a government scheme to cut energy usage for poorer households.
Will Straw, associate director at of the IPPR thinktank, also questioned why the big six think "profits of 5% to 6% are acceptable in a competitive market".
"In 1998, as the market was liberalised, the regulator believed 1.5% was an adequate margin for energy suppliers. Profits in other sectors like supermarkets are as low as 2%."
Asked about the wholesale power prices, a spokesman for nPower pointed to comments by Paul Massara, its chief executive, who said earlier this year: "The main factor behind rising costs is government policy and regulation to fund this country's transition to a more efficient economy, with modern infrastructure and warm, insulated homes for all."
An EDF spokesman said wholesale energy costs have "not been the main driver of increases in prices". He added: "When we last raised our prices in December 2012 we made it clear that a major driver was the increases we were seeing in the charges for transmission and distribution of energy to our customers."
He also said EDF made no profit from supplying residential homes in the last three years and said it was impossible to do a "perfect match-back between the tariff increases and the year-on-year increase in costs".
A spokesman for E.ON acknowledged wholesale prices influenced its power prices but said "energy bills are about much more than just wholesale costs", with just over 2% accounting for profit.
In the House of Lords last night, Lord Jenkin condemned the energy "oligopoly" and tabled an amendment calling for greater competition.
Another amendment in favour of decarbonising all of Britain's electricity by 2030, tabled by Lord Oxburgh, a former chairman of Shell, narrowly failed to pass.
Original Article
Source: theguardian.com
Author: Rowena Mason
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