Energy company profits

Energy companies have added to the debate around energy prices by announcing increased profits.

SSE has seen half-year profits surge by 38.3%. The company made £397.5m in the six months to the end of September, compared with £287.4m in the same period last year. Like other major energy suppliers, SSE put up its domestic gas and electricity prices by an average of 9% one month ago.

Then Scottish Gas owner Centrica revealed it is set to make profits of £1.4 billion this year after increasing its energy bills by 6%. Analysts also predict around £575 million of pre-tax profit from its British Gas residential arm after gas consumption for the first 10 months of 2012 was 9% higher because of colder than normal weather. The group makes most of its profit from upstream gas and oil exploration.

Mike Jeram, head of business and environment at UNISON said “It is chilling that companies such as SSE should announce these enormous half-year profits when families are being forced to take the hit for yet another massive price hike.”

Adam Scorer, of watchdog Consumer Focus, said: “Energy companies need to make profit so they can invest in our energy infrastructure. But if confidence is to be rebuilt in this market, the information that all energy firms are required to provide must be fully transparent, comparable, and include profit and trading information from across the whole of their business.”

The energy companies blame hikes in the price of wholesale gas for increases in household bills that are passed to the consumer. However, the Financial Services Authority (FSA) is investigating claims that the UK’s wholesale gas market has been manipulated by big power companies, a scandal which could echo that of Libor price fixing. It is possible that the prices for wholesale gas may have been manipulated by suspicious trading on 28 September, which is the end of the gas financial year.

Meanwhile, 658,000 households in Scotland are living in fuel poverty, expected to reach 800,000. Research by Uswitch suggests 87 per cent of households will be rationing their energy use this winter.

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