Energy network companies have raked in nearly £4bn in excess profits from household bills over the past four years, according to Citizens Advice. The watchdog claims Ofgem, the UK energy regulator, overestimated borrowing costs, allowing regional network companies to charge consumers inflated rates – while many firms secured fixed-rate loans and dodged rising interest costs.
Ofgem’s calculations, covering 2021 to 2028, have left households paying billions unnecessarily, all while facing a cost-of-living crisis and soaring energy debt. Dame Clare Moriarty, CEO of Citizens Advice, slammed the situation, saying: “While households have struggled with sky-high energy bills, network companies have been making astronomical profits.”
How Did This Happen?
Energy networks, including National Grid, UK Power Networks, and Scottish Power, operate under Ofgem’s pricing rules. These rules aim to let companies recover costs while rewarding them for exceeding efficiency targets. But Citizens Advice argues these “undeserved profits” far exceed what’s reasonable.
Ofgem has since promised adjustments to price controls, claiming any impact on consumer bills was minimal. Industry representatives argue that long-term investments justify the profits, with a spokesperson for the Energy Networks Association (ENA), which represents network companies, saying electricity networks are bringing in private investments of more than £100bn in grid upgrades between 2021 and 2031. The ENA insists this will promote economic growth and argues that the Citizens Advice report ignored “the longer investment timeline.”.said
What About Business Energy Contracts?
If households have been overcharged, what about businesses? The UK energy industry has a long-standing issue with hidden costs, particularly in commercial energy contracts. Energy brokers and intermediaries often add undisclosed commissions, inflating business energy bills without transparency.
Many businesses don’t realise that brokers build huge commissions into their deals, often taking a percentage of energy costs without disclosing it. This lack of transparency means companies are paying far more than necessary – sometimes for years.
Time to Act
If your business has signed an energy contract, you could be paying hidden commissions without knowing it. Through our efforts we have successfully helped reclaim millions for UK businesses facing broker mis-selling. Find out if you’re eligible for a game changing payout by starting your claim https://businessenergyclaims.co.uk/start-your-claim/ or contact us at: [email protected] 0800 689 4259 to reclaim what’s rightfully yours.