Experts put the boom down to the energy firm's failure to pass on cheaper wholesale gas prices to its customers.
E.ON, the German parent company of the firm - which has six million customers in Britain -announced that Powergen's profits soared to Â£296million in the first quarter of 2007.
It made Â£29million over the same period last year.
Analysts at banking giant JP Morgan estimate E.ON is on track for record UK earnings of more than Â£860million for 2007 as a whole.
Its profits leapt 21 per cent to a staggering Â£2.25billion in the first quarter of 2007 alone.
Campaigners say that the delay in cutting prices has created billions in profits for an industry which has pushed through repeated bill rises recently.
These have taken the average annual gas and electricity bill to more than Â£1,000.
Activists have called for an investigation into the utilities industry amid suspicions that there isn't enough competition to deliver fair prices.
A survey last month claimed gas firms had effectively stockpiled Â£490million of customers' money after failing to adjust direct debits in line with falling prices.
Powergen cut the price of gas by 16 per cent and electricity by 5 per cent from April 30 this year.
But data from the consumer group Energywatch shows its gas prices are still 74 per cent higher than in January 2003, when aggressive price increases began across the industry.
Karen Darby, founder of the price comparison site Simplyswitch, said, "The fact of the matter is that British consumers are still paying way over the odds for their energy.
"Wholesale energy prices have come down 60 per cent since this time last year, but the suppliers are posting record profits and saying it takes time for this to filter through.
"Customers are still getting a very raw deal and are struggling to pay their bills.
"There seems almost to be a tactical war of words playing out for headlines, as firms use marketing ploys to show they are offering a better deal.
"It's galling that consumers could have suffered so long."
Powergen remains the second most expensive supplier out of the 'big six' companies for dual-fuel customers paying by direct debit, according to data from uSwitch. Only EDF Energy is more expensive.
A spokesman for Energywatch said price cuts across the industry have been too little and too late.
She added, "Prices for consumers have not come down as fast as they should have.
"Companies are very quick to raise prices but very slow to cut them.
"It is legitimate for companies to earn profits. But there needs to be some kind of balance or equity between the rewards for shareholders and rewards for consumers."
E.ON defended the profits announcement, saying the rise in profits reflected a dramatic improvement from unusually poor conditions at the beginning of last year.
A cold winter in early 2006 and shortfalls in wholesale gas supplies drove up wholesale prices but it did not fully pass on these increased costs to consumers, the firm argued.
Against that background, the latest results reflected 'a return to normal', a spokesman added.