I get your point about the low-margins, but here in the U.K. at least, the margin on gas is only a few pence at best anyway. They actually make most of the money from selling candybars, washer fluid etc. Besides which, a low cost product does not necessarily entail low margins - look at gift cards for example. They cost pennies to make, and are sold at a 5-fold mark-up - yet people still buy them. As long as they can sell electricity cheaper than gas, then people will be able to make a profit easily.