The official regulator for the energy industry, Ofgem, reported on 27 March that suppliers’ retail profits — from selling energy to households and businesses — had risen to £1.1 billion in 2012 from £233m in 2009. No austerity for the energy bosses!
It also found “a pattern of suppliers raising prices more rapidly and to a greater extent in response to an increase in costs than they reduce prices in response to a fall in costs”.
Ofgem has called for another official body, the CMA, to investigate the industry and report whether collusion and lack of competition is allowing the big energy companies to gain super-profits. First comes a consultation, closing on 23 May, before the investigation gets under way.
Knowing that the Ofgem report was coming, one big energy company, SSE, tried to cover itself by announcing on 26 March that it would freeze prices until January 2016. Since SSE increased its prices last September by 8.2%, it can well afford the freeze.
SSE’s move exposes the squawks of complaint made last autumn by energy bosses when Ed Miliband proposed a freeze. They said a price freeze would make the industry “unsustainable” and doom it to “economic ruin”.
But it also shows that energy bosses can afford a short price freeze and still pocket large profits.
Solidarity says that the entire energy industry should be taken under democratic public ownership, with workers in control in the workplace. Immediately, the profit principle can be abolished along with the complex market structure of Suppliers, Agents, Distributors and Generators.
That public and democratic control would also ease the way for energy generation to be de-carbonised and shifted to renewables and new-generation nuclear, in tandem with programmes to improve housing and public spaces.
Up to 69% back public ownership of the energy industry in opinion polls.