A spokesperson for the Energy Networks Association, which represents network companies, said the Citizens Advice report was “overly simplistic” and ignored “the longer investment timeline”, adding: “Electricity networks are bringing in private investment of more than £100bn between 2021 and 2031, investing in our grid to promote growth in our economy.
The flaw in Ofgem’s regulation, which applies from 2021 to 2028, has meant that households were forced to pay billions in undeserved profits to companies during the cost of living crisis while racking up record levels of debt, according to Citizens Advice.
Moriarty said: “We’ve called out the billions of pounds of excess profits made by these companies before, and Ofgem said it would get tougher in subsequent price controls.
It found that Ofgem allowed regional network companies to recover these costs from household bills even though many were able to secure fixed-rate terms on some of their borrowing which helped them to avoid the impact of rising interest rates.
The analysis, by Citizens Advice, argued that energy network owners were able to make the “excess profits” over the past four years after the industry regulator misjudged their costs.
