Electricity network operators have been accused of making “huge” profits over the last six years that have added £10 billion to consumers’ energy bills.
That’s according to new analysis by the Energy and Climate Intelligence Unit (ECIU), which found the six firms that own and operate the network of towers and cables bringing power to homes and businesses made annual profits of 32% on average.
That amounted to householders paying around £27 per year between 2010 and 2015.
It also found the Distribution Network Operators (DNOs) paid dividends to their shareholders amounting to 15% of turnover, which was roughly half of the final profits.
That amounted to around £850 million per year or roughly £13 on the average domestic bill.
The news follows Citizens Advice’s analysis earlier this year, which found DNOs made £7.5 billion in “unjustified” profits over eight years.
John Penrose, MP for Weston-super-Mare said: “This report suggests that Ofgem has been asleep at the wheel while the network operators have been overcharging everyone for years.
“What’s the point of a regulator that doesn’t stick up for consumers against vested interests, whether it’s the Big Six energy firms or the firms that own the pipes and wires which get energy and power to our homes? We need a heavyweight, cross-sector regulator that isn’t scared to do its job and which won’t turn tail and run at the first sign of resistance.”
Ofgem however believes consumers get “good value” from its regulations, adding network costs on bills have fallen by 17% over the last 30 years.
A spokesperson added: “Ofgem has so far secured an additional saving of over £4.5 billion for consumers from the current price controls by a combination of reduced revenues or voluntary contributions from companies.
“We continually look for ways to get a better deal for customers on network costs. Therefore we have told the network companies to prepare for tougher price controls from 2021 with lower overall returns.”