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Ofgem has ‘utterly failed to protect the public from a £1.5bn bill demanded by rapacious energy profiteers,’ Unite charges

OFGEM has “utterly failed to protect the public from a £1.5 billion bill demanded by rapacious energy profiteers,” Unite charged today.

The union said the regulator is not doing enough to “rein in rampant profiteering” by energy distributors, including UK Power Networks, owned by mega-rich Hong Kong-based conglomerate CK Group.

The warning came after the independent watchdog announced its latest five-year cost framework for the sector, set to run between 2023 and 2028.

The new arrangements will mean that customers, who already pay about £100 a year in network charges on their bills to subsidise investment designed to future-proof the electricity grid, will not face a rise in costs.

But bills will not come down despite falling take-home pay and 40-year high inflation.

Unite argued that average operating profit margins of more than 50 per cent for UK Power Networks — Britain’s biggest electricity distributor — are being subsidised by overstretched households. 

It called for Ofgem to reopen the public consultation which informed its new price framework and “draft determinations to introduce much tighter control of profits.”

General secretary Sharon Graham said: “This price review will allow distributors to pick bill-payers’ pockets as we all overpay them by at least £1.5bn in the next five years — this cannot go unchallenged.”

After a Unite poll earlier this week showed most adults would support more “stringent regulations” on the sector, Ms Graham said the union would now “escalate our campaign by taking this issue to MPs in the worst-hit areas.”

Ofgem also announced today that distributors will be forced to spend more of their profits on the upkeep of the electricity grid.

The change, which comes into force on April 1, is urgently needed to prepare for the added demand expected as more homes and businesses choose electric cars and electric heating, the body said.

In addition to UK Power Networks, the companies affected include Scottish and Southern Electricity Networks, Northern Powergrid, SP Energy Networks, Electricity North West and National Grid.

The move means companies can invest £22.2bn of customer cash in the network, £3bn less than requested by bosses, but 6 per cent higher than Ofgem’s original proposal in June. 

The regulator’s Akshay Kaul claimed it “carefully considered all the work that will be required and set the budget for the networks accordingly, at no extra cost to consumers.”

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