Anyone feeling the financial strain of high energy bills, whether the charges are blamed mainly on subsidies or other factors, won’t find this pleasant reading. Tariff Watch says its report is ‘revealing the secret data behind Britain’s broken energy system’.
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Energy companies’ operating costs are making up a substantial portion of customers’ bills, says Energy Live News.
On average, these operating costs add £242 to each customer’s annual energy bill, accounting for approximately 13% of the total bill, according to a report from the Warm This Winter Tariff Watch.
The report indicates that energy firms are allocating a considerable chunk of their operating costs to marketing activities.
This category encompasses expenses related to sponsoring football teams, event venues and the creation of television adverts.
According to the report, the cost of marketing activities amounts to roughly 11% of their overall operating expenses, charities have said.
In contrast, spending on maintaining customer contact centres, a crucial aspect of ensuring customer satisfaction accounts for around 12% of their operating costs.
Ofgem allows energy companies to adjust these costs for inflation.
Over the past six years, this inflation-driven increase has amounted to 37.5%, rising from £176 annually in April 2017 to £242 annually as of October 2023.
However, the authors of the Tariff Watch report argue that this approach lacks transparency and call for a reevaluation of how these operating costs are factored into customers’ bills.
Full article here.
via Tallbloke’s Talkshop
October 11, 2023 at 11:15AM
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