ENERGY networks have rinsed £7.5 billion in “unjustified” profits from customers, a charity revealed yesterday as it demanded the money be paid back.
Citizens Advice accused Britain’s toothless energy watchdog Ofgem of allowing networks to make billions in returns on their capital investments at the expense of households.
The charity wants energy network companies to return the money to consumers in the form of a rebate through lower bills.
Citizens Advice chief executive Gillian Guy said: “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 £7.5bn price for the regulator’s errors of judgement. “We think it is right that energy network companies return this money to consumers through a rebate.”
Ofgem has come under fire because it is responsible for restricting the amount that consumers pay for energy networks through gas and electricity bills. Energy networks — such as National Grid — are monopolies and so Ofgem sets limits on the maximum amount these firms can recover to fund the operation and investment in their networks over an eight-year period.
Citizens Advice said Ofgem had made errors in judgement by being too generous towards network companies.
The regulator warned gas and electricity networks to expect tougher price controls from 2021.
Shadow energy secretary Rebecca Long-Bailey described the £7.5bn figure as “quite simply eye-watering.”
She said: “The Tories have completely failed to deliver an energy system that works for people, businesses or our environment.
“They have no choice, there is no option to shop around as these companies hold a monopoly over the network, which is why Labour proposed to gain greater public control and transparency over these companies in our manifesto.”
Left energy campaigners, including the National Pensioners Convention, have rubbished caps and said that only renationalising energy will prevent consumers being ripped off.