UK Utilities allowed to profiteer
by NICK ROSEN on JUNE 28, 2012 - 0 Comments in energy

Retail prices sometimes rise when wholesale falls

This graph of wholesale and retail electricity prices reveals how successive governments allow the big Utility companies to make bumper profits, increasing the price of electrciity when it is falling on the wholesale markets.

The UK industry buys and sells the energy produced in its power stations, or brought over from French nuclear plants via wire.  Different factors, such as a change in the price of oil, gas or coal, can affect the cost of creating energy.  But the retail price rarely falls, and usually goes up.  In 2008 for example, when prices collapsed due to the looming financial crisis, retails electricity actually spiked upwards in the UK.  The same happened in mid-2011 – wholesale prices fell and retail prices rose, and the same thing appears to be happening again. 

Even when retail prices do fall, it is never very far and only after bumper profits have been made.

This chart does not even show all the profits made by power companies, as the profit made by power stations as they sell the energy onto the wholesale market is not included and many of the companies that service the ordinary consumer are also in the energy generation business.

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