Independent auditors must check energy suppliers’ books – Ofgem
Ofgem is proposing new rules that include energy suppliers having their annual statements independently audited.
The regulator hopes it will make information on energy company revenues, costs and profits “more robust, useful and accessible” and therefore increase consumer and business confidence that they are being reported accurately.
The deadline for publishing statements will also be reduced from six months to four months after the end of the financial year.
Latest figures released by Ofgem show the big energy companies that dominate power generation and supply made combined earnings of almost £17 billion before interest and tax in the last five years. It also revealed annual profits had risen from £8 in 2009 to £48 in 2013.
However, Big Six supplier profits from generation and supply fell from £3.5 billion in 2012 to £2.8 billion in 2013, partly because companies have been closing power plants.
Rachel Fletcher, Senior Partner for Ofgem’s Markets Division said: “With energy prices rising and many struggling to pay their energy bills, there is understandably significant public interest in the profits of the large energy companies and particularly the profits of their retail businesses.
“Our proposed reforms are providing increased transparency on company profits. This is important to inform public debate, encourage competition and to help suppliers rebuild customer trust.”
The rules are are expected to come into force next year.
ELN has contacted Energy UK – the trade body for the energy sector – for a comment.