Putting people before profits? That's exactly what we're doing
Putting people before profits? That’s exactly what we’re doing
We’re all familiar with the headlines that claim energy companies are making huge profits at the expense of their customers. Speaking recently even the Prime Minister said he wants to see energy firms “putting people before profits”.
I would argue, however, that this is exactly what we do. In the past six years RWE, the Group behind the npower brand, have invested millions of pounds a year in Britain: in new power stations, in improving energy efficiency, and in social schemes to help our most disadvantaged customers. A 2012 Report by Bloomberg for Greenpeace stated:
“RWE npower has been by far the biggest spender in the UK power market since 2006… It has built over 2.5 times the new capacity of any of its Big 6 peers… 60% of investment going into renewables.”
We’re proud to have invested more into Britain than any other major energy firm in recent years, and it’s this type of investment that creates highly skilled, well paid jobs across the country, powers the UK’s economy, and keep our homes warm and our businesses running.
RWE npower pays up front the billions of pounds its costs to build new power stations to secure an affordable future energy supply. That money comes from our profits, from our shareholders, and the institutions that lend us money, such as pension funds and other major investors. They invest in us because they expect that we will make a sufficient profit to provide a fair and steady return on their investment over many years. Put simply, without profit, we would not be able to deliver the much needed investments that Britain needs in new, clean energy, or indeed, fund the delivery of Government energy policy.
We’re well aware, however, that many households are concerned about rising energy costs, and we’re committed to providing the best price that we can for customers. Many of the costs on a bill we can’t control, such as wholesale energy costs and funding for Government emission reduction schemes, but we can control our own operating costs.
Today, we’ve announced our financial results for 2012 and our business performance has improved compared to 2011. However, our domestic supply business – the business of supplying households with electricity and gas – made a loss for each of the three years before 2012.
The profit margin for our retail and generation activities we’ve announced is only 5%. That’s about the same that many supermarkets make on your weekly shop, and much lower than the profit margin the majority of FTSE businesses make. Most importantly, it’s a far cry from the huge profits that people and politicians believe we make.
As well as making sure we keep our profits at an appropriate level, we’re helping customers to take control of their energy costs through energy efficiency improvements.
We’re also working hard to give our customers the best service. Last year we invested over £70 million in our retail business in order to improve customer service operations. We’ve also restructured our business to allow us to focus on our customers. It’s an area I want us to excel in, and we’ll continue to invest in it until we’re number one for customer experience.
So, yes, we must make a profit, but people, as well as profits, will always be a central part of how we do business.
CEO, RWE npower