Furious MPs demand £4bn energy firm windfall goes towards helping bill payers

MPs have demanded that energy companies hand over some of their nearly £4billion in profits that plunged millions of households into debt.

The companies behind Great Britain's gas pipes and power lines have pocketed £3.9billion from household bills during the energy and cost crisis.

Bill Esterson, chair of the Energy Security and Net Zero select committee, said: "British energy consumers are £4 billion in debt, while network companies have made over £4 billion in excess profits.

"These profits have come simply from outperforming price controls, even as millions of families ration energy or go without heat.

"We're calling on the Government to use these windfall profits to fund a lasting energy debt relief scheme, recognising the deep and enduring impact of the energy price crisis.

"But this must only be the start. Non-commodity costs like upgrading the grid and building new sources of energy generation are making up an increasing amount of the household bill. The Committee will be focusing on how bills might be reduced in the next phase of our cost of energy inquiry."

Household energy debt has surged to £4.43 billion, Ofgem figures showed last month, a record figure which has more than tripled in five years.

The regulator reported that 1,133,683 electricity customers and 926,545 gas customers were in debt without any repayment arrangement in place.

The collective debt is leaving households facing up to an extra £145 a year on their bills to cover the shortfall.

Charities have reported a sharp rise in people seeking support with energy billing issues, despite the rollout of smart meters that the committee said has been "sluggish, unreliable, and has failed to achieve adequate coverage across Great Britain".

Ofgem should now halve the back billing period to six months for customers with a smart meter, the parliamentarians said.

The group of MPs added that the regulator should introduce an energy debt relief scheme to protect consumers against debt and provisions for debt forgiveness.

Ministers must also place the energy ombudsman on a statutory footing, without which it remains "toothless".

An Ofgem spokesman said: "This issue (the £4bn windfall) arose due to very high levels of inflation in the early 2020s, unseen for 30 years, and we made clear to network companies that they should use this to strengthen their balance sheets to benefit consumers and support those who need it most.

"Ofgem has since implemented regulatory changes to bear down on costs across the energy system to get the best deal for customers, curtailing industry profitability and setting tougher targets on service performance.

"The decision to not apply these changes retrospectively was based on the risk that reopening the price control could lead to other costs to consumers that outweigh the potential benefits from recovering any gains. This was recognised by Citizens Advice in their original report."