Give families rebate says charity as power giants rake in £7.5bn profit

HOUseHOLDs should be given an energy bill rebate after power companies made ‘unjustified’ profits of £7.5 billion, a charity said.

Citizens Advice argued that energy firms such as National Grid, which builds and maintains power lines and gas pipes, have been profiteering.

It blamed the energy regulator, Ofgem, for approving a regime that has led to higher bills. About a quarter of the annual bill – £280 – is made up of levies that are paid to Britain’s 11 network companies.

Firms in the spotlight include National Grid, sse electricity Networks, GTC, electricity North West and scottish Power elec- tricity Networks. The industry and Ofgem use complex formulas to establish the size of the levy applied to customers’ bills. But Citizens Advice said errors by Ofgem have effectively allowed the network firms to make huge profits in the past eight years.

Gillian Guy, chief executive of Citizens Advice, said: ‘energy network firms are enjoying a multi-billion pound windfall at the expense of consumers.

Decisions made by Ofgem have allowed gas and electricity network companies to make sky-high profits that we’ve found are not justified by their performance. Through their energy bills, it is consumers who have to pay the £7.5 billion price for the regulator’s errors of judgment. We think it is right that energy network companies return this money to consumers through a rebate.’

Ofgem head Dermot Nolan said: ‘While we don’t agree with its modelling and the figures it has produced, the report raises some important issues about network regulation which will be addressed.’

National Grid rejected the idea of a rebate, saying it has limited levies voluntarily. It said: ‘National Grid is already delivering value for consumers, including the £460 million of savings our performance has generated.’