First Utility Responds to Ofgem Report on “Big Six” Profits

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In response to an Ofgem report released on the 12th April, First Utility released a statement.

First Utility

First Utility is the UK’s largest independent energy supplier.

we're actively campaigning for greater liquidity in the wholesale market which has the opportunity to level the playing field and enable more competition and provide consumers with lower prices.

In response to an Ofgem report released on the 12th April which highlighted the increasing generation profits of the “Big Six” energy companies in the UK, independent energy provider First Utility released the following statement.

"The UK energy retail market remains dominated by the Big Six who hold more than 98% market share 20 years after deregulation. New entrants including First Utility are penalised by having to buy power from a wholesale market that is inherently biased towards those that have vertically integrated business models.

While it’s difficult to make absolute conclusions from the latest Ofgem report on Big Six profits, the fact that generation profit margins have risen while retail margins have fallen is indicative of the significant advantage vertical integration creates in an illiquid wholesale market which is inherently flawed.

The control the big six have over the wholesale market makes it difficult for independent suppliers to compete on price, which ultimately harms consumers. The Big Six generation margins are nearly 25% and increasing because they are not exposed to the market pressures which drive efficiency unlike other truly competitive industries. This is bad for competition and, ultimately, bad for consumers.

There must be a better way and that's why we're actively campaigning for greater liquidity in the wholesale market which has the opportunity to level the playing field and enable more competition and provide consumers with lower prices.”

About First Utility

First Utility is the UK’s largest independent energy supplier. It supplies gas & electricity to over 180,000 residential and business customers throughout the UK. First Utility is pioneering the use of new technology within the energy sector to empower its customers to control their energy spend. It was also the first UK energy supplier to offer smart meters to all its customers in 2008. In 2012 it launched my:energy, an online analytics service which provides households and businesses with personalised information regarding their energy usage with the aim of giving customers cheap electricity and gas.

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