Friday 12 January 2018

DNO profits ‘could drive household bills up £20’

Electricity network companies' high profits could add £20 to household energy bills this year.

That's according to the Energy and Climate Intelligence Unit (ECIU), which says in the first year of the current price control mechanism, the six distribution network operators (DNOs) earned an average profit margin of 30.4%.

If this level of profit margins continues through 2018, it will make the average household electricity bill each year about £20 more expensive than if their profits were at a similar level to those of the ‘Big Six’ energy firms.

The ECIU says network costs now make up more than a quarter of the average domestic electricity bill.

It adds DNOs made average annual profit margins of around a third in the previous six years, equating to roughly £10 billion on the country's total energy bill over six years, around £27 per household.

Richard Black, Director of the ECIU, said: "Ministers, the press and the public are rightly worried about energy bills and the news that these monopoly operators are making profits beyond most companies’ wildest dreams will only add to these concerns.

Ofgem is proposing reducing allowances across all DNOs by £206.8 million.