At today's Energy and Climate Change Committee the bosses of the Big Six are likely to face a grilling by MPs over recent hikes in customer bills.
There are six large gas and electricity suppliers in the UK – usually referred to as the ‘Big Six’.
At today’s Energy and Climate Change Committee the bosses of the Big Six are likely to face a grilling by MPs over recent hikes in customer bills.
And so they should: the recent price hikes have brought to public attention something that has been going on for many years: rising bills for customers and bumper profits for the big energy firms.
Fresh analysis of Ofgem data on customer bills shows profit currently stands at six per cent – significantly more than the 1.5 per cent suggested as a profit margin price control for energy supply by the market regulator in 2008.
Here is a quick round up of recent profits, executive pay and bonuses at the Big Six.
Last week Scottish Power (SP) announced that would be putting up the price of its gas by an average of 8.5 per cent and electric by 9 per cent from 6 December.
Scottish Power is a particularly interesting case in that last year it more than doubled its pre-tax profits to £712m. The company’s chief corporate officer Keith Anderson also received a £129,000 bonus, taking his total pay for 2012 to over half a million pounds, according to the Guardian. The Spanish chairman of Scottish Power also had his pay packet doubled to £10.5 million in 2011 – you guessed it, shortly before the company raised prices for 2.4 million British households.
ScottishPower’s accounts for last year showed that £890m was paid out to the shareholders of Iberdrola. Bonuses for directors rose from £19,000 to £129,000.
Npower announced last week that it would be putting up energy bills by 10.4 per cent from 1 December – the highest price rise so far by any supplier. And yet it was reported in April of this year that, despite raking in an estimated £766 million in profit over the last three years, the company paid no corporation tax.
Npower chief executive Paul Massara was asked in April by the Commons Energy Select committee how much corporation tax the company had paid in the years 2009, 2010 and 2011.
Massara replied: “We will not have paid corporation tax in those three years. There is a very simple reason why, because effectively we have invested £5bn in the last five years building power plant, creating jobs, creating employment and helping to keep the lights on.”
Last year profits at Npower increased by 25 per cent to £390million soon after it imposed large price rises on customers.
The company, owned by German utility firm RWE, saw profits from its UK customers and power stations increase by £77million from £313million.
It also recently emerged that Npower bosses have paid out £35million in bonuses in the past five years.
Scottish and Southern Energy (SSE)
Energy company SSE announced two weeks ago that it would be raising electricity and gas prices by an average of 8.2 per cent from 15 November.
This year, the top three directors at SSE were due to see their pay double, with the highest paid director set to pocket a total pay packet of just under £2 million (1.9m) compared to £1.1 million in 2012.
The other two executive directors both earned £1.4 million this year compared to just short of £700,000 in 2012.
Earlier this year the Daily Record reported that Ian Marchant stepped down as chief executive of Scottish & Southern Energy with, as well as an £840,000 salary worth £1million with bonuses, a £9million pension pot. He also left with share options worth up to £4.8million.
For 2012, the company made profits of nearly £1,500 a minute.
Centrica (British Gas)
Earlier this monthBritish Gas announced that bills would go up by an average of 9.2 per cent for 8 million customers from November 23.
Centrica, the company that owns British Gas, saw adjusted operating profit rise by 9 per cent to £1.58bn for the six months of 2013 to 30 June. Five bosses also pocketed £16.4 million in March of this year. This week British Gas was accused of boosting its balance by keeping hold of money owed to ex-customers who have built up credit on their accounts by using less energy than their estimated consumption.
Profits at E.on grew by almost 15 per cent in the first half of 2013, boosted by a cold winter, making £273m in the first six months. This was an increase of 14.7 per cent on the same period in 2012.
Chief executive of E.ON Johannes Teyssen pocketed a basic salary of €1m (about £860,000) in 2010; the real value of the total package, however – including bonuses and share options – is thought to be €4.2m (£3.6m).
E.ON is yet to announce its price rises for this winter.
EDF actually made £92m losses for domestic supply in 2012. However the energy giant made record profits of £903 million in the UK for the first half of 2013 due to increased gas use due to the coldest spring in 50 years. The company increased bills by 10.8 per cent on average last year but has yet to announce this year’s price increases.
In January 2012 EDF was criticised for cutting prices by 5 per cent – just two months ago it increased them by 15.4 per cent.
EDF is also yet to announce its price rises for this winter.
Leave a Reply