Rise in National Grid profits fuels anger

National Grid fuelled anger over soaring energy bills as it revealed a hike in earnings from UK gas and electricity networks after increasing the amount it charges households.

A National Grid van in Sheffield.
A National Grid van in Sheffield.

The group, which levies energy bill customers for the cost of distribution and transmission, revealed a 7.7 per cent rise in 
UK operating profits to £1.2bn 
for the six months to September 30.

It said it was on track to deliver “strong returns” for the UK business over the full year, although tougher trading in its US arm dragged overall operating profits down one per cent to £1.6bn.

Pre-tax profits fell seven per cent to £979m.

The group also confirmed a dividend windfall for shareholders, with plans to pay out 14.49p per share.

Details of the payout and UK profits haul comes at a time of mounting fury over rising energy bills and the levies that have added to the cost of heating and powering homes.

The “big six” providers have partly blamed charges for energy distribution and transmission for recent increases in tariffs.

These have risen by £12.23 
over the past year and now add around £175 to household bills a year.

National Grid’s makes its UK revenues on energy bill levies, which are determined by regulator Ofgem to allow spending on infrastructure.

The group is operating in the first year of an eight-year price control regime set by Ofgem.

Steve Holliday, chief executive at National Grid, insisted it planned to invest around £3.5bn on new energy networks this financial year under its goal to “provide customers with reliable networks while generating value and driving growth”.

But the group’s regulated costs came under recent attack from Tim Yeo, chairman of the energy and climate change committee, who has written to the Prime Minister calling for greater scrutiny of these charges set by Ofgem for delivering energy to homes.

He believes Ofgem has been too lenient in its price-setting agreements with National Grid.