OREANDA-NEWS. July 08, 2015. Energy is one of the most scrutinised industries in the UK – and rightly so.  As an industry that generates and sells a product the country relies on and that is inherently a major household purchase, as CEO of a UK-listed energy company, I believe we have to be held to higher account and reach higher standards than other businesses.

And energy companies really have been scrutinised. Today’s report by the Competition and Markets Authority is the result of more than a year of independent investigation by expert economists and lawyers. After dissecting the industry their initial verdict is that whilst many features of the market are considered competitive, they also have some ideas for reform. 

The CMA is keen that customers take advantage of the best deals and that we create the framework for them to do this. Clearly, it is impossible to disagree with that perspective and I am committed to working with the CMA  in this area. 

It was also interesting to see comments from the CMA around making bills and information clearer. I could not agree more. The regulatory straight-jacket regarding what goes into a bill needs to go – and be replaced with something that customers actually want. 

One part of the announcement that is concerning is their assessment that profits were too high in supplying energy.  I can’t speak for others on this but across the six years since Ofgem required energy companies to publish separate retail profit margins, SSE has averaged 5.1% profit - ?57 per customer.  When we asked customers about this profit margin they said this was a fair return and not excessive.  

I also noted the CMA’s concern around the fact that customers are having to foot the bill for the transition to a low carbon economy. I have long argued that the costs of funding things like nuclear and renewables, as well as Government insulation programmes should be paid for through taxation – so perhaps now is the time for a change in how these are funded. 

With such a big investigation, there are many details we will need to come back on, but at SSE we will respond constructively to all of these.  Energy is a necessity, not a luxury, and we know we need a market we can trust.