The business and energy secretary, Greg Clark, plans to meet energy company representatives after a report appeared to show them extracting larger profits from households than they claimed.
A report commissioned by Energy UK, the industry lobby, showed that the cost to the big six energy companies of providing a dual fuel bill was £844 this year.
TheBigDeal.com, a campaign group, said the average bill was more than £1,000 and could be as much as £1,172 for standard tariff customers. Households on standard tariffs make up 70% of users despite lower rates on offer from shopping around.
The figures suggest profit margins of up to 28% for British Gas, SSE, EDF, E.ON, npower and Scottish Power. That is seven times the 4% figure claimed by the industry and used by Ofgem, the energy regulator.
Clark said the report’s disclosure appeared to confirm his concern that the big energy companies were abusing their customers’ loyalty.
“Customers who are loyal to their energy supplier should be treated well, not taken for a ride, and it’s high time the big companies recognised this,” he said.
“I have made clear to the big firms that this can’t go on, and they must treat customers properly or be made to do so. I want to look into the evidence the report contains and will ask Energy UK to meet with me to discuss its findings.”
The leaked publication, reported by the Sun, threatens to reopen the debate about how much energy companies charge customers, particularly older and poorer people who are less likely to shop around.
The Competition and Markets Authority said in 2015 that the big providers were overcharging often vulnerable customers by £1.7bn a year, or £234 per household, and proposed a temporary price cap for the whole market.
By the time the watchdog published its final report five months ago, however, it had watered down its criticisms and limited the recommended price limit to customers on prepayment meters.
Energy UK said the Sun’s version of the report was a draft and that it was commissioned to show different factors affecting the average bill over the years. It said the figures could not be used reliably to show supplier margins on the cheapest or most expensive tariff.
The lobby group said: “The report is not ‘secret’. Energy UK rejects completely any implication that the report was designed to alter the perception of supplier profit. It is simply a way of demonstrating how pressures on energy bills have changed over recent years.”
Will Hodson of TheBigDeal.com said it was significant that the version of the report on Energy UK’s website left out the cost figures that allowed calculation of profit margins.
“It’s depressing but not surprising that [the figures have] only come to light thanks to a leaked report that the big six trade body Energy UK never wanted the public to see. We need much more transparency. The profit margin for every big six tariff should be published in full.”
