Households Overpaying £125 on Electricity Bills

• Citizens Advice warns that households pay too much for electricity
• Excess profits being made by companies
• Some households entitled up to £125 in rebate

UK households are overpaying for their electricity bills, according to Citizens Advice.

The charity said that households are ‘footing the bill’ for billions of pounds in excess profits that are made by electricity distribution companies.

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Last year the charity said that decisions by the regulator in the way it calculated price controls across the gas and electricity networks had cost consumers a total of £7.5 billion, or on average £285 per household over the eight-year price control.

Gillian Guy, Citizens Advice chief executive, “People across the country are overpaying on their energy bills because some network companies are making unjustified profits.

“Ofgem has signalled its intention to deliver a tougher settlement on the network companies and a better deal for consumers.

“The regulator will undoubtedly face strong and sustained opposition as the networks try to protect the status quo.

“Ofgem must hold its nerve and make sure that the next price control delivers much better value for consumers.

“But rather than wait for the next price control to be in place, firms which hasn’t already should return these unjustified profits to consumers as a matter of priority.”

According to Citizens Advice, electricity networks alone are set to make excess profits averaging £75 per households across the eight years, even in less affected regions in London, South East England, and the North West.

It calculated that households in Merseyside and North Wales are entitled to a rebate of £125, while those in South West England and Northern Scotland should be given £110 back.

It is calling on networks to return the money to their customers.

The charity is also calling on Ofgem to ensure that its next set of price controls deliver a better deal for customers.

An Energy Networks Association spokesman said, “The calculations underpinning this analysis are plucked out of thin air and run directly counter to the conclusions of the independent regulator and the Competition and Markets Authority.

“Network costs are down 17% under the current ownership model, delivering £9 billion of savings for consumers by running a world-class system of energy networks for efficiently.”