Energy companies not making exorbitant profits: regulator

The three largest Dutch energy suppliers are not making exorbitant profits from the still high energy prices, the Netherlands Authority for Consumers and Markets (ACM) reported after inspecting their books and purchasing strategy. Last year, Eneco, Essent, and Vattenfall’s profits were between 0 and 5 percent, comparable to previous years.

The high prices consumers have to pay result from high purchasing costs for gas and electricity. Suppliers often buy gas and electricity on the wholesale market a month or longer in advance, which is why consumer prices are still high while purchase prices are falling. Suppliers also have to pay more to insure themselves against risks in the volatile energy market, ACM said.

“I fully understand that many people consider the energy prices to be unreasonable. There may be a suspicion that energy suppliers are making extra high profits. That is not the case,” said ACM chairman Martijn Snoep. “High purchasing costs in the volatile market cause the high prices. If prices on the wholesale market continue to fall, this should soon reflect in suppliers’ rates. We keep a close eye on that.”

According to the ACM, consumer rates are already falling. As of today, March 1, prices on new variable contracts are 10 to 20 percent lower than a month ago. The number of suppliers offering fixed-rate contracts is also on the rise, and more suppliers’ rates are dropping below the government’s price cap on energy