It has been revealed that families could face higher power bills, despite major energy companies enjoying their biggest profits in five years.

Ofgem, the industry regulator, yesterday Okayed a multibillion-pound upgrade of the national grid, which will include the huge expense of connecting wind farms.

It stated that the cost would be passed on to customers via yearly levy charges of £4.30 per household on their utilities such as electricity bills. The payment is in addition to the proposed increases to pay for the shift to green energy and nuclear power.

The acceptance of a rise comes after statistics revealed the gap between what energy firms pay for gas and electricity and the amount they charge the public ballooned to a five-year peak.

Household bills have only come down on average by just 4%, despite wholesale energy prices falling by more than 50% since summer 2008.

This means the likes of British Gas, Scottish & Southern Energy, Eon, RWE nPower, EDF and Scottish Power are in line for huge profits.

Consumer Focus, said the profit margins are as much as £85 per customer. The energy companies insist that they are only making small profits as they are investing billions in new sources of power.

Robert Hammond, energy expert at Consumer Focus, said: “The big question is how much longer consumers will have to wait to get a fair deal. Suppliers should cut prices now, not wait until winter bills have boosted their profits.

“If energy firms will not do the right thing by their customers, then it is time for an investigation into the industry by the Competition Commission.”

The Tories have repeated calls for the Government to investigate whether customers are being scammed.

Gas hike

Many experts and electricity firms have commented on the increase. “The reality is that companies may be making some modest profit this year after around 4 years of making either none at all, or a loss,” said Energy UK - a new communications unit representing the leading gas and electricity suppliers.

The statement added that energy itself only accounts for about half of customer bills - with the rest including things like the cost of renewable energy, as well as the cost of getting the energy from its source into homes.

Ofgem chief executive Alistair Buchanan said “Ofgem’s role is to ensure companies can invest, but do not use investment as a shameful excuse to overcharge consumers. At the moment, the effect of companies smoothing prices has been neutral on consumers, but, if prices stay unchanged in the new year, then we will see customers losing out.”

He added that the proposals were “tough on inefficiency and poor service but fair in allowing the companies to invest”. He said the new controls would lead to a greener electricity supply.