Rocketing energy bills = £6bn pay out for shareholders
Despite many consumers struggling with higher gas and electricity costs, the big six energy companies have continued to make significant payments to their shareholders
According to The Mirror, the big six provided their shareholders with a total of close to £6bn in 2013.
In stark contrast, customers of these companies were hit with winter energy price rises, which saw the average energy bill rise by about £53 per year.
EDF Energy paid out the most
French energy company EDF Energy was able to provide its shareholders with £1.748bn worth of dividends in 2013, followed by npower’s parent company RWE, which paid out £1.312bn.
British Gas’ parent company paid dividends of £862m, SSE £770.5m and E.ON, which was last week fined a record £12m for mis-selling energy, paid its shareholders £933m.
ScottishPower’s parent company, Iberdrola, issued £149.7m worth of dividends.
‘Shareholders want a return for their investment’
Energy UK, the trade association for the energy industry, defended its members and said price rises were a result of government policies which increased levies and network costs.
In a statement Energy UK said: “Shareholders want a return for their investment and dividends are an effective way of providing this. Many of these investors are pension funds and what an energy company pays in a dividend is important to a great many pensioners in this country.
“There has to be a balance between the customers and the investors. Prices went up last year primarily due to government levies and network costs.”
Small energy suppliers growing in popularity
As a result of the price rises, an unprecedented number of households have left the big six for an independent supplier. In fact, British Gas was forced to issue a profit warning earlier this month as it has lost 180,000 customers to date in 2014.
First Utility is currently offering the cheapest energy plan with its iSave Fixed August 2015 tariff. The latter will set back the average consumer £992* per annum.
* Based on a medium usage customer using 3,200 kWh of electricity and 13,500 kWh of gas paying by direct debit with bill sizes averaged across all regions.