By Sean Poulter
A major inquiry is being demanded into profiteering energy firms after British Gas figures soared to a record £742million.
Profits were up by a quarter in 2010 following the coldest December in 120 years and a shock 7 per cent price rise ahead of the winter.
The firm’s parent company Centrica also announced record profits of £2.4billion – up by almost a third on 2009.
The huge profit margins enjoyed by country’s ‘big six’ energy suppliers are being investigated by the industry regulator Ofgem.
It is coming under pressure to announce a formal inquiry by the Competition Commission to establish whether consumers are being overcharged.
The allegation is that firms are quick to pass on any increases in wholesale energy costs, but delay passing on cuts – raking in billions from struggling customers.
High energy bills over the winter have been a disaster for families and pensioners also struggling with big increases in the cost of food, petrol and clothes.
Research suggests that millions rationed their heat and endured the cold over the winter for fear of generating bills they could not pay.
Mike O’Connor, chief executive of the official customer body, Consumer Focus, said: ‘We need successful energy companies – but consumers may look at today’s profits and at recent prices rises and question how one justifies the other.
‘The issue is about whether the energy market is working properly and Ofgem’s review must try to answer this question once and for all.
‘If the regulator identifies systemic weaknesses in the energy market then it should seriously consider whether a Competition Commission investigation is needed,’ he added. Ann Robinson, director of consumer policy at uSwitch.com, said: ‘Soaring profits will be cold comfort to British Gas customers who were slapped with a price hike at the beginning of the winter and have been feeling the impact ever since.
‘More than three-quarters of consumers have cut down or rationed their energy use this winter because of cost.’
However, Centrica chief executive Sam Laidlaw said the company’s profits were ‘for a purpose’.
The company has pledged to spend £15billion over the next decade on nuclear, wind farms and gas-fired generation.
Yesterday, the firm announced a £2billion deal with Qatar for the supply of enough gas to meet the needs of around 2.5million UK households. It will also invest £450million in its Ensign and York gas fields in the southern North Sea.
Mr Laidlaw said: ‘We’re in a volatile situation with commodity prices and we will do all we can to keep bills as low as we can.’
MY SHOCK AT £20,000 BILL
An elderly customer awaiting a heart operation has been traumatised by receiving a bill for £20,000 from British Gas, backed up with threats of legal action.
David Exon, 71, who lives with his wife Mila in Eastbourne, said: ‘I have a pacemaker and am due to have a new one fitted. I also have serious angina.
‘The effect of suddenly receiving a bill for £20,000 is quite traumatic.
‘Even though I know full well it is rubbish, the trouble is you can’t stop them sending out these bills.
‘My worry is that they will pass the case to a debt collection agency and I will lose my creditworthiness.’
Asked about the utility company’s recent announcement of record profits, he said: ‘I am not surprised if this is how they make their money.’
After being contacted by the Daily Mail, a British Gas spokesman admitted there had been a mistake.
He said: ‘We are undertaking a thorough account review.’