Energy watchdog Ofgem was slammed for getting its sums “big time wrong” today by the boss of trade body Energy UK.
Yesterday the regulator published data showing suppliers’ profits were less than £1 per household per week last year.
This was totted up from historical average of bills, costs and profits reported by larger suppliers.
It showed the margin – i.e. how much they could make after paying for the gas, network costs, government charges and taxes – was £49 across 2013.
Previously Ofgem predicted suppliers would make an average £120 last year, more than double the actual average, in one of its regular reports called the Supply Market Indicators (SMIs).
Chief Executive Angela Knight told ELN: “What we’re saying is that Ofgem with its estimates, which is SMIs, are almost invariably not just wrong but big time wrong.
“What’s happening is the big number estimate is taken as correct and no one’s waiting for the accurate figure. What’s wrong with an accurate figure?”
Ofgem sidestepped blame for people misunderstanding its prediction, she suggested: “Policy makers get misled. Ofgem say it’s not our fault, it’s the way the media run it out. That’s a cop out, how does this help getting sensible discussion?”
She also questioned why Ofgem put out the forward-looking figures: “It doesn’t use the kind of detail sufficiently which one expects to see from an authoritative body.”
Regulator Ofgem defended its SMI predictions. A spokesperson said: “We stand by the need to have these indicators.
“It’s absolutely not meant to represent individual profits of energy companies.”
Giving an idea of what may happen in the future is useful to consumers, the spokesperson added: “If you’re just backward-looking, you have no idea what’s happened in 2014.”