Revealed: How Big Six energy firms conceal their profits

http://www.independent.co.uk/news/uk/home-news/revealed-how-big-six-energy-firms-conceal-their-profits-8930039.html

Market experts express concern that giants are not being fully candid about profit margins they require to fund investments in bid to deflect growing public anger

Image of an electricity pylon tree

The Big Six energy firms have been accused of misleading consumers about the reasons for their sky-high bills by glossing over the large mark-ups they charge for the electricity they generate.

In interviews with The Independent, several market experts expressed concern that the energy giants are not being fully candid about the profit margins they require to fund investments, in a bid to deflect growing public anger.

Defending the latest round of price hikes last week, the industry’s figurehead, Angela Knight, said suppliers worked on margins of just 5 per cent which were justified to pay for “extremely large” investments necessary in their businesses.

But Caroline Flint, Labour’s shadow Energy Secretary, has accused the companies of a lack of transparency, and of diverting attention from the much higher margins they make from their electricity generation arms. “It’s misleading for energy companies to pretend their profit margins are only 5 per cent when that only refers to their profits on supplying energy,” she said.

“Their profits on generating energy are much more substantial and are often close to 20 per cent. If energy companies want to rebuild trust in this market, as a first step they have to start being straight with people about exactly how much money they’re making.”

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