Investigation into energy firms begins
February 29, 2008
An investigation into whether there are competition issues amongst the UK’s major energy suppliers has now been launched by the energy regulator Ofgem. The regulator is looking into the gas and electricity markets that supply to both residential properties and to small businesses. This comes after concerns were raised by watchdogs and campaigners over how effective the market is and how much consumers and businesses are having to pay for their energy.
Centrica, which owns British Gas, has recently received criticism from campaigners and watchdogs after announcing huge increases in profits shortly after hiking up the price of energy usage. At first Ofgem had refused to carry out any investigation, but has now decided to do this in order to respond to these concerns, although officials have added that they do not foresee any competition problems.
An official from Ofgem stated: “The decision to conduct the probe is in response to public concern about whether the market is working effectively. We are concerned about the increased volatility of wholesale prices and we want to investigate how European and other global energy market developments are affecting energy bills in Britain.”
A spokesperson from the watchdog Energywatch said: “Consumer concerns have demanded this sort of response. We hope it will shed light on how the energy market fails consumers and what can be done to fix it.” Another industry official said: “The impact of prices on vulnerable consumers is of real concern, and it’s vital that all consumers have access to competitive markets.”
However, Centrica officials have said that there is no problem with the energy markets, stating: “There have been 15 inquiries into the energy market in the last seven years and each of them has given the industry a clean bill of health.”
Comments
Got something to say?