Umm, but what are people complaining about here?
The big six, which include SSE and RWE, already under fire for increasing domestic bills during an economic downturn, but the latest weekly Ofgem projections show dual-fuel retail bills are now up to an average of £1,420 a year, delivering £95 in profit per customer – a profit margin for the firms of 7%.
A 7% margin? People are complaining about this when Apple makes 40%? Seriously?
As to the generation profits:
Ofgem said average margins in generation across the big six increased from 18.4% in 2010 to 24.4% in 2011.
That number looks a little odd. If it were true then half the world would be lining up to invest.
He said the wholesale margin needed to be higher given that it funded power stations and forward contracts for up to £50bn of new gas supplies. \”We believe it is a fair margin.\”
What? You mean Ofgem is publishing figures showing gross margin, before capital costs? What the wankery are they doing?
Anyone who is interested: what\’s the actual final return on these businesses? The return on capital which is the correct measure?