Energy companies to receive cash back from families to cover their own rising costs despite crippling bills

GREEDY energy companies will receive cash back from families this year thanks to a change in the way Ofgem works out the price cap.

Despite families facing crippling bills this winter, gas and electric suppliers have this year been handed a windfall to cover their own rising costs.

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The hidden extra is to help companies, already raking in bumper profits, tackle fluctuations in wholesale energy prices during the year.

This year, Ofgem claims suppliers need the allowance because of how much winter costs have rocketed.

Campaigner Howard Cox, founder of Fair-FuelUK, called for the loophole to be closed, saying it should not be used to further fill the bulging pockets of energy companies.

He said: “Any veiled openings for energy companies to manipulate the watchdog’s pricing control mechanisms must be blocked.

“Ofgem must ensure that it is consumers who must be safeguarded from changes to price caps.”

The sum will help companies like E.ON, which made £3.4billion in the first half of the year, and SSE, which made £1.2billion, to cover their costs.

It also means suppliers can recover those expenses over six months rather than having to wait a year.

Experts say the ­timing is poor — but it will help stop suppliers going bust, which only costs customers more in the long run.

Ofgem said: “This is all in the interests of stabilising the market and making sure consumers and suppliers pay a fair price.”

This post first appeared on thesun.co.uk