Much anticipated investigation ordered into UK energy market

Post by George Dixon on 27th March 2014 in General industry

Much anticipated investigation ordered into UK energy market

The large-scale probe into the workings of the domestic gas and electricity markets in the UK which we wrote about yesterday was announced this morning by competition regulators.

The Competition and Markets Authority (CMA), has been asked by energy regulator Ofgem to determine whether the way in which the energy providers are structured works in the interests of consumers.

If it finds this isn't the case, many observers believe the so-called 'Big Six' energy companies could be forced to hive off parts of their business, and separate their generating and energy buying divisions from their customer-facing operations.

Ofgem chief executive Dermote Nolan welcomed "the opportunity to once and for all clear the air and decide if there are any barriers preventing competition from bearing down as hard as possible on prices."

The Financial Times noted that the ordering of the report came after an Ofgem investigation had found that energy firms' profits from supplying domestic and most business customers had more than quadrupled between 2009 and 2012.

Consumers' advocate group Which? welcomed the move, its executive director Richard Lloyd saying: “Energy suppliers should not wait to be forced into action but instead start now to put customers first, keep costs as low as possible and trade transparently”.

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