Energy and climate change secretary Ed Davey has put forward new proposals that would see anyone guilty of manipulating energy prices facing up to two years in prison.
The new laws would give more power to energy regulators and would make it a criminal offence to artificially ‘rig’ wholesale gas and electricity prices in the UK.
Currently, regulators can investigate claims of unfair practice, but those caught breaking the rules can only be fined.
The aim of the measures is to safeguard customers and discourage activity that affects competition in the energy market.
Ed Davey said of the proposals, “Manipulating the energy market is absolutely unacceptable, and these proposals provide a much stronger deterrent – more in line with the approach taken in the financial markets.”
This comes at a time when the Competition and Markets Authority (CMA) has begun an 18-month investigation into competition in an energy market dominated by six companies, with the aim of improving customer trust.
Complaints to the ‘big six’ energy companies reached record highs in June, with worries over increasing energy bills causing customers to flock to smaller energy companies, such as Good Energy and Ecotricity.
Energy watchdog Ofgem welcomed the proposals, saying, “Ofgem has a track record for taking strong action against companies that break the rules. And we want the strongest possible deterrents in place to guard against market manipulation and insider trading.
“We put forward the case to government for greater powers to take action if needed, and we welcome this consultation”, said Rachel Fletcher, senior partner, markets at Ofgem.
The Department of Energy and Climate Change (DECC) said if they are approved by parliament, the new laws could come into force in spring next year.
Photo: Oleg Zaytsev via Flickr
Take our 2014 reader survey and you could win an iPad, Kindle or donation to a charity of your choice.