With prices going up, millions of the big 6's customers certainly feel the firms are making too much cash. How much are they really making?
Energy regulator Ofgem has announced rules to limit tariffs to four simpler options, but what customers really care about is the cost.
We speak to one of those who was actually doing the selling. He left the job because he found he had to 'take advantage of a human being.'
The "big six" energy firms made an average profit margin of 20 per cent for energy generation in their last financial year, according to figures released by energy regulator Ofgem.
The results are likely to fuel further anger over rising gas and electricity bills.
The key figures included:
- Profits in the domestic supply business increased by 75 per cent
- Companies made on average £53 per customer each year
- Average profit margins increased from 2.8 per cent to 4.3 per cent in 2012
- The big six made an average profit margin of 20 per cent for energy generation in the last financial year
Five of the six companies that own and operate the UK's local electricity network have been told they must do more to cut costs for consumers.
Energy regulator Ofgem has rejected their business plans for the period between April 2015 and March 2023.
Western Power Distribution, which serves customers in south Wales, the Midlands and the southwest of England, was the only company to have its price controls agreed early.
Around 19% of an annual electricity bill is made up of network distribution costs.
Energy regulator Ofgem and the Financial Conduct Authority have concluded there is no evidence to support the allegations the gas market was rigged.
Ofgem and the FCA find no evidence of alleged gas market manipulation - http://t.co/wwwPSp7Icx
Ofgem has issued a warning to energy firms that they need to work hard to win consumer confidence, since prices will 'inevitably rise' over the next few years.
The energy regulator's Chief Executive Andrew Wright said "It's important that, and I don't want to be a harbinger of doom... but potentially the inevitability of rising prices, that consumers feel confident that these rising prices are both fair and justified."
"Consumers are frustrated and angry that the latest round of price rises have happened at a time when incomes are already being squeezed."
Ofgem said data shows that while the price rises announced this autumn by the energy companies have averaged 9.1%, wholesale prices have risen by just 1.7% - adding just £10 to the average household bill of £600.
The energy regulator said that its estimates for the wholesale price were based on how a representative supplier would typically buy energy, using forward purchases of gas and power at 12, 18, or 24 months ahead, to smooth out volatility in prices.
These buying strategies vary between suppliers, meaning each sees different overall changes to wholesale energy costs.
But the industry regulator said that looking ahead to this winter, the price paid for energy by suppliers was rising sharply compared to last winter, with gas up 8% and electricity up 13%.
The Prime Minister's official spokesman said Ofgem has given "a very strong signal" that energy companies will not "get away with" bad practice after the it fined ScottishPower £8.5 million.
Asked if David Cameron was happy with the level of the fine, he replied:
Those must be, of course, decisions for the regulator but I think it does send a strong signal in response to bad practice that was being looked at here.
Ofgem chief executive Andrew Wright said the reforms on fixed term deals will make the energy market "simpler, clear and fairer" and make it easier for consumers to "vote with their feet".
Mr Wright said in a statement:
In an era of rising prices it is vital that competition works as effectively as possible.
Our reforms seek to give consumers the tools they need to find the best energy deal for them and to ensure that suppliers have to treat them fairly.
Now we are looking for energy suppliers to pick up the baton and put their efforts into restoring consumer trust.
Ofgem said its new rules on fixed term energy deals will give consumers more protection so they have certainty the price and conditions they signed up to will not be altered.
The energy regulator said consumers will not be rolled-over to a new fixed term deal once their contract has ended, "but to a tariff which allows them to switch away without penalty".
Customers will also get over 40 days warning that their fixed deal is coming to an end so they have plenty of opportunity to compare the market and find the best deal for them.
Energy regulator Ofgem has introduced tougher rules on fixed term contracts.
The new rules, which come into force today, include:
- Fixed means fixed - customers on fixed term tariffs are given certainty on price
- Automatic roll-overs on to another fixed term deal when a contract ends are banned
Ofgem believes these reforms will lead to simpler energy tariffs from the end of December.