The voice of the energy industry

Energy UK responds to Sun allegations

Energy UK commissioned PwC to use publicly available data in providing a guide on how different elements such as wholesale, network, policy and operational costs make up an average energy bill.  

Energy UK asked PwC to revise the report over a period of time to ensure the methodology was robust and the information was accurate. This involved ensuring modelling of costs was rigid and actual rather than forecasts of profits and costs were used wherever possible. 
The report is not ‘secret’. The final report is published on the Energy UK website. The development of the methodology involved a number of drafts that changed as we developed the most robust account. The Sun report is based on one of those drafts.
Energy UK said:
“The Sun article is very misleading on profits being made from consumers on standard variable tariffs.
“The purpose of the report was simply to help understand how the different pressures on an average bill have changed over recent years. It was not intended to present, or to hide, how much profit different firms make across their various tariffs. 
“It is not possible to use the information in the report to calculate the actual margin achieved by individual suppliers against their various tariffs. For that reason, Energy UK used Ofgem data on margins drawn from the publicly available Consolidated Segmental Accounts of major energy suppliers. Ofgem shows actual average supplier margins of 4 percent. That is the figure that appears on the Energy UK website.
“The numbers presented in the PwC report and on the Energy UK website represent averages across all tariff types. It is not possible to use this data to calculate, accurately, supplier margins on either the most expensive tariff or the cheapest tariff.  The cost of buying energy for Standard Variable Tariffs (SVTs) will be higher than for a fixed term deal where you know more about usage and volume so can buy specifically for them. None of this is reflected in the article in the Sun.
“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.”
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