More focus on energy prices as profits rise
In the wake of MPs questioning the transparency of energy company profits, two big companies have announced an increase in profits.
First out is the French utility EDF, reporting record first half profits of £903m. Followed by Centrica whose operating profits rose 9% to £1.58bn over the same period. Both companies claim their profits come from the generating rather than the retain businesses.
However, this begs the question raised by MP’s over transparency of profits between operating divisions. As Norrie Kerr of EAS put it in today’s Scotsman, “EDF’s profits are not unexpected when we look at those of other energy companies. But over 42 per cent of gas and electricity bills are made up of wholesale prices. EDF, like the others, generate electricity through one arm and sell it to themselves and others. That part of the market is not transparent and no-one but the energy companies themselves understand how this market works. The Energy Committee recently said that Ofgem need to do more to get answers on what is going on.”
To the public struggling with ever higher energy bills and rising fuel poverty, record profits simply dont look right.
Mind you, if the energy companies think they get a hard press, spare a though (but no sympathy) for Tory peer Lord Howell. He was forced to apologise for suggesting that fracking could take place in ‘desolate’ north-east England without any impact on the surrounding environment.
Labour peer Lord Beecham, said: “Neville Chamberlain spoke of pre-war Czechoslovakia as ‘a far away country of which we know nothing’. Lord Howell clearly has a similar view on the North East and his comments once again highlight the Tories’ problem with the north. Perhaps he’s forecasting the future the North East faces as a result of government policy – a ‘largely uninhabited and desolate’ place where there’ll be few people to object.”
- Posted in: energy prices