Link to this page: https://www.socialistparty.org.uk/issue/805/18396
Unplug the 'Big Six' profiteers
The massive energy price rises at the end of last year have forced 4.5 million households into fuel poverty, families deciding whether to heat their homes or to eat.
Such is the anger that this has provoked against the energy com-panies that politicians, regulators and big business have been forced to react.
The 'Big Six' energy companies (British Gas, SSE, npower, EDF Energy, ScottishPower and E.ON) control 95% of the market.
Ofgem (the energy regulator) has said that dual fuel prices, where a customer takes gas and electricity from the same supplier, had risen by 24% between 2009 and 2013.
They also saw a big jump in suppliers' retail profits - from selling energy to households and businesses - from £233 million in 2009 to £1.1 billion in 2012, a cool 372% increase.
When Ed Miliband said last autumn that a Labour government would freeze energy prices for a very modest 20 months, energy bosses claimed it was the end of the world - led most forcibly by Alistair Phillips-Davies, boss of SSE, the second biggest energy supplier.
Now, feeling the heat, Phillips-Davies has announced that prices will be frozen until 2016.
Perhaps they have chosen to jump rather than be pushed. Ofgem has referred the Big Six to the Competition and Markets Authority (CMA).
The Big Six could be broken up, including separating the supplier side from the generation side of the business - a convenient arrangement where power companies sell energy to themselves.
Ofgem is also concerned that there might be "possible tacit collusion" between the companies on prices. How much are these people being paid? I could do that job!
The inquiry could take two years which would mean any decisions would be made after the next general election.
Two years to find out what everyone knows. It's like an episode of the political sitcom 'Yes Minister'.
Big business pundits and analysts are predicting that any threat to energy profits will lead to a withdrawal of much needed investment in new generation capacity.
In 1990 the then state owned Central Electricity Generating Board operated on up to 25% surplus capacity margins.
That is now down to 5%. The power companies raked in the profits without reinvesting in and maintaining capacity.
With the decommissioning of coal fired plants and end of life nuclear reactors and the now less than certain gas supplies from Russia, experts believe the situation could present risks of blackouts.
SSE's announcement also included its decision to withdraw involvement in four massive wind farm projects saying it was too expensive, there weren't enough subsidies and there is too much 'green crap' tax. No wonder the power companies are being accused of blackmail.
The power bosses have made their position clear. 'You touch our super profits, we'll turn out the lights'.
Workers should reply, 'we'll keep the lights on, thank you very much, we'll turn you out instead'.
In The Socialist 2 April 2014:
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