Pull the plug on energy profiteers call
Unite says Ofgem must re-open its price review and set a clear cap on distributor profits
Unite general secretary Sharon Graham has written to the Ofgem CEO, Jonathan Brearley , and Chair, Martin Cave, to demand that the Regulator clamp down on excessive profiteering by energy distributors.
‘Unite investigates’ – the union’s research and investigation arm – has established that last year the major energy suppliers, distributors, and generators made £15.8 billion in profits.
According to research by Common Wealth, Distribution Network Operators have higher profit margins than any other sector in the UK – with eye-watering operating profit margins of over 50% expected in 2022.
DNOs involve less well-known companies like UK Power Networks owned by CK Hutchison, the Hong-Kong based holding company that also owns Felixstowe Ports and one of the UK’s biggest water companies.
In the last four years, for example, UK Power Networks has recorded £2.4 billion profits. In the same time it handed out over £800 billion in dividends to shareholders.
Unite is calling on Ofgem to re-open its price review and set a clear cap on distributor profits. Distribution Network Operators have higher profit margins than any other energy sector.
Sharon Graham said, “Electricity distributors like UK Power Networks are milking profits during this energy crisis. The regulator is failing to properly reign them in. They’ve been holding the public to ransom for too much and for too long.
“Ofgem is a regulator that doesn’t regulate,” she added. “Time for that to change. How long must the public pay for profiteering from the likes of UK Power Networks? It’s time to pull the plug on the energy profiteers.”
UK Power Networks operates a monopoly and distributes power to 1 in 4 UK homes concentrated in London and the South East. With network costs making up around a fifth of consumer bills, this is leaving bills far higher than they need to be.
A decision of the price regulation process for the electricity distribution networks, RIIO-ED2, is due to conclude by December. The current draft determinations for RIIO-ED2 do not go far enough to clamp down on excessive profiteering by the DNOs. The regulatory process remains too heavily dominated by the energy companies with far too little role for the millions of workers and consumers who are impacted by the decisions that Ofgem makes on energy prices.
By Ciaran Naidoo