British Gas announce rise in profits thanks to cold weather, Love Energy Savings sees discontent from consumers.

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Winter months help BG see rise in profits, now facing a backlash from consumers in the wake of November price rises.

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While future investment is a necessary action for energy companies, it’s always disappointing to see price rises for consumers while companies boast increasing profits.

British Gas report profits from households have increased over 2012 by 11% from the year earlier, to £606m. Gas consumption had also risen by 12%.

Centrica, the company behind British Gas, adjusted their operating profit to £2.7bn in 2012, a rise of 14% from 2011. Dividends to shareholders have risen 6%; the company is returning £500m to them.

The company faced criticism after raising prices in November when profits were also rising. Sam Laidlaw, chief executive of Centrica said the firms profit per household had decreased, the company made less than £50 profit per household.

He added “A 5% margin on the business is the sort of margin we need” in order to invest in new energy sources.

Responding to the criticisms of the 6% price rise in November, he said it was “lower than any of our competitors”. However, from Nov 2010 to Jan 2013, British Gas has seen higher price rises than 3 of the other ‘Big 6’ energy companies.

The Prime Minister stepped in on the issue of energy price rises and has decided to force energy companies to put consumers on their cheapest tariffs. Ofgem released plans of the tariff last week; it includes making bills easier to understand and cutting down the number of tariffs suppliers offer.

Jonathon Stead, Marketing Executive at Love Energy Savings said: “Year after year energy prices are increasing, that’s why it’s becoming more and more important to make sure you’re getting the best deal on your home or business energy. Using a comparison company like Love Energy Savings will help ensure that you’re not wasting money paying over the odds.”

There are many other reasons companies may increase pricing. If an energy company needs to acquire a new site for oil extraction they may invest in satellite technology to do geo-scans to locate underground sources, a very costly endeavor. They may also engage in exploratory drilling, which doesn’t always yield profitable results.

Investments in renewables and other green technology are also quite expensive, it is debated whether or not consumers should face the bill for this however. Some argue that if the future of energy generation (and to that extent, the future of all energy companies) lies in those areas, they should be investing into those areas out of their own pocket.

“While future investment is a necessary action for energy companies, it’s always disappointing to see price rises for consumers while companies boast increasing profits.” Said Mr. Stead, he added, “We’re always looking for ways to reduce homes and businesses energy costs, to help safeguard them for rises like this, as well as maintaining great relationships with our suppliers to get the best rates from them.”

Love Energy Savings is an energy comparison company based in Bolton. For a free, online comparison of your home or business energy, head to Love Energy Savings. No personal details are required and a comparison in generated in seconds. You can also call 0800 988 8375 to speak to an energy expert who will take you through available tariffs and find a better deal for you.

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Jonathon Stead
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