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ENERGY firm operating costs are making up £242 of customers’ bills, a report has revealed, while supplier profits are expected to rise by 8 per cent due to the price cap changes.
An analysis of operating costs by the Warm This Winter campaign reveals today that energy firms may be spending almost as much on marketing, which includes sponsoring football teams, event venues and creating TV adverts, as they do on operating customer contact centres.
General operating costs, which go into the standing charges paid by households, also consist of central overheads such as office rents and the cost of maintaining energy meters.
Ofgem allows energy firms to increase these costs with inflation — up 37.5 per cent in six years.
But Tariff Watch report authors argue that this approach lacks transparency and now makes up an average of 13 per cent of customers’ bills.
The report also reveals that suppliers are now expected to make an additional £140 million in profit on the nation’s energy bills over the next 12 months, following changes to the Ofgem price cap which came into force this week.
The new rules mean that firms now make an average £64.70 profit per customer per year, up by £4.70 per customer.
Warm This Winter spokeswoman Fi Waters said that the operational spending costs “add insult to injury for households struggling to stay warm this winter.”
She said: “Customers should not be subsidising fancy headquarters, entertaining and marketing when these companies are making billions.
“That money should be used to end energy debt and lower bills.
“It’s yet another example of our broken energy system which the government and energy firms seem to be in denial about.”
End Fuel Poverty Coalition co-ordinator Simon Francis said: “Britain’s broken energy system continues to inflict misery on homes across the country with increased standing charges and profits hurting consumers while rewarding the energy firms.
“But while households suffer, the government sits on its hands and refuses to introduce tariff reforms which could bring down bills and help people stay warm this winter.”
Mr Francis also warned that Britain’s households will be “trapped in cold damp homes for years to come,” as Prime Minister Rishi Sunak halts works on energy efficiency improvements for homes and buildings.
