Centrica’s profits on their retail energy supply business fell by 43% according to their half year accounts and the media. The cost to buy the energy people use is MUCH higher than the price customers pay under the price cap. Centrica only makes a profit because it has hedged future volumes, it has effectively fixed prices in advance. Little suppliers did not do this and went bust.
Centrica makes a tiny profit margin on energy supply contracts even with hedging. I understand that under the special administrative regime, the government did not hedge costs at all, this is a terrible choice and will have cost a fortune (not sure if they are hedging costs now). So you can be assured that nationalising energy supply is not necessarily a great idea.
Energy companies have made the vast majority of their profit from Upstream (production) and energy trading. These profits go to their shareholders (including pension funds and the like !) or are reinvested in the business (renewables are very capital intensive) - it’s in everybody’s interests for companies to be well managed. The profits aren’t kept by fat cats.
Centrica is talking about reopening the Rough gas storage facility as early as this winter which will need a lot of upfront cash to update it.
It’s convenient to call energy companies thieving robbers, but it’s ultra-complex - think of transmission and distribution networks, long-term purchase contracts, complex hedging strategies, renewables, regulatory policy, volatile geopolitical risks etc, all for 2% margin. They don’t charge customers lots and just keep it ! Energy suppliers would probably like to leave their energy supply businesses to the government and keep the profitable elements - good luck to them…….