SSE hits back at Ofgem margin claims

14th Oct 2011 11:38

Gas and electricity group SSE has hit back at claims by the energy regulator OfGem that profits energy companies make from each customer a year have increased to £125. Ofgem says that its margin estimate is based on an average dual fuel bill of about £1,345 a year and that, though margins are likely to fall next year."The approach adopted by Ofgem in calculating this figure is entirely theoretical and does not reflect how a responsible energy supply business manages its energy procurement strategy in reality," SSE says.It points to variations in Ofgem's net margin estimates over the past year."In June 2011, Ofgem's number was £15, in March 2011 it was £75, in December 2010 it was £90 and in September 2010 it was £65," it says."The 'snapshot estimate' needs to be compared against SSE's Consolidated Segmental Statement for the last financial year, which reported a profit for supplying domestic customers of £266 million, which equates to around £62 or 6% per dual fuel customer."SSE says it does not expect its margin to change significantly for the current year as a whole and points out that it has already said that its financial results for the first half will be 'substantially lower' than last year.