Citizens Advice published research on Wednesday, finding companies transmitting gas and electricity around the UK — such as the National Grid — were reaping an "eye-watering" average profit margin of 19%.
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UK energy giants 'should give a £285 rebate to each household' after taking £7.5 billion in profits
'Energy network firms are enjoying a multi-billion pound windfall at the expense of consumers,' said Gillian Guy, chief executive of Citizens Advice.
Drax Power Station, Selby, North Yorkshire, England
That compares to the 4% average profit margin made by the "Big Six" suppliers selling gas and power to UK households.
Citizens Advice says the disparity is driven by the fact the UK's gas and energy networks are regulated monopolies while gas and power suppliers are forced to compete with one another on prices.
The report said Ofgem, the energy regulator, had made three key decisions which allowed energy companies to earn inflated profits:
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The charity said energy firms should issue the £7.5 billion back to UK households in the form of a one-off £285 rebate, which is approximately one-quarter of the average household's annual bill.
Gillian Guy, chief executive of Citizens Advice, said: "Energy network firms are enjoying a multi-billion pound windfall at the expense of consumers.
"Decisions made by Ofgem have allowed gas and electricity network companies to make sky-high profits that we’ve found are not justified by their performance.
"Through their energy bills, it is consumers who have to pay the £7.5 billion price for the regulator’s errors of judgment. We think it is right that energy network companies return this money to consumers through a rebate.
"If energy network companies fail to return these unjustified profits to the consumers that paid for them then the government should consider stepping in," he said.
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