Energy companies should maintain more transparency

The Business Secretary, John Hutton has said that the Britain’s major energy suppliers should be transparent on, how much profits they are making from the energy supply and power generation arms. He urged to Ofgem, the power regulator that there is need of transparency in the financial records of big energy companies, which is causing confusion in the public and damaging the standing of the energy industry.

Mr. Hutton has also shown his concern on the fact that the failure of record maintenance about profits means that there is no data available, to which potential contestants to the market can refer; hence, it is like holding back the competition.

According to the Financial Times, Mr. Hutton wrote to Ofgem that the recent energy price hikes cannot be explained when these big energy companies are making profits in their business. He also wrote that the lack of transparency in accounts has created confusion in media and public.

Mr. Hutton has supported the fact that the energy companies have to make enough profits so that they can invest in renewable energy projects and new infrastructures. He has contrasted the plan of putting a windfall tax on this sector. However, he has reemphasized that some energy companies like, Eon UK, RWE Npower, Scottish & Southern Energy, Scottish Power, and EDF energy should maintain the transparency.

On the other side, these companies argued that they are providing enough information on the subject, but Ofgem said that the data is not sufficient to prove the need of price hikes and any healthy competition.

Aides from Mr. Hutton side said that he is not sure whether Ofgem is doing any cross-subsidisation between supply and generation arms of these energy companies, but he is sure that Ofgem is keen to explore the issue.

Please visit www.ofgem.gov.uk for more details