South West better off on energy bills

Energy consumers in the South West are better off than elsewhere in the UK according to the energy watchdog, Ofgem.

A report by Ofgem shows that five of the ‘Big Six’ energy companies were not sufficently demonstrating value for money.

The report however praises Western Power Distribution’s (WPD) for putting in place a plan to reduce costs for customers.

WPD only operates in the South West, The Midlands and South Wales meaning that those elsewhere in the country must use another provider.

Ofgem’s Head of Distribution, Hannah Dixon said: “Western Power Distribution responded well to Ofgem’s challenge to demonstrate good value and drive improvements for consumers while reducing the distribution part of their bill."

The other five energy companies have had their plans handed back to before and are expected to resubmit plans which provide better deals for customers.

The report comes at a time when the majority of energy companies are facing renewed criticism for making larger profit off the rising energy cost.

The latest estimates suggest that the energy companies’ average profit per household will rise to £105 this year- over three times as much as the £30 per household made in 2011.

These estimates became available in a separate Ofgem report on company profits issued today.

TUC General Secretary Frances O’Grady said: “Ofgem shows excess profits are the real source of soaring energy bills. With the government prepared to cap pension charges and pay-day loan interest, they should do the same for energy bills, and stop suggesting that anyone who supports a price cap lives in a Maoist commune.

“We also need to ask hard questions about why some ministers have been prepared to go along with energy company bosses in blaming green levies and help for the less well-off, when what has gone wrong is profit grabbing in a bust market.”

Ofgem however, has said that the profit increase is not solely down to increased prices but also due to an increase in the volume of energy delivered by the companies.

A spokesman for UK Energy, the industry association, said: “Ofgem's report sets out the earnings before tax paid for supply side and for generation. The figures do not take into account the costs of the huge investment the energy companies are making, the interest or the tax they are paying. These are not net profit figures.

"Ofgem supports what the companies have been saying. The main reasons customers have seen their household bills go up is because the cost of gas and electricity have gone up as well as other add-ons, such as the social and environmental policies, rising fast.