The energy watchdog Ofgem has announced that the energy sector will face an 18-month competition investigation by the Competition and Markets Authority (CMA). The inquiry will seek to determine whether the market is fair and will try to rebuild consumer trust in energy companies.
Ofgem proposed the investigation back in March to tackle declining consumer confidence, and has now confirmed its decision.
Dermot Nolan, Ofgem chief executive, said, “The energy market is also going to change rapidly over the next few years with the rollout of smart meters, the government’s electricity market reforms, and closer integration with European energy markets.
“A CMA investigation should ensure there are no barriers to stop effective competition bearing down on prices and delivering the benefits of these changes to consumers.”
The inquiry will have particular focus on the big six energy suppliers – British Gas, SSE, E.ON, EDF, Npower and Scottish Power – and their rising profits, at a time when complaints by their customers have reached an all-time high.
The CMA said in a statement it will “shortly appoint independent panel members to the Investigation Group and publish a timetable setting out a schedule for the various stages of the investigation”,
Juliet Davenport, founder and chief executive of the specialist renewable energy supplier Good Energy [http://www.goodenergy.co.uk/affiliates/blue-green], welcomed the decision.
“Effective competition will give consumers more choice amongst a range of suppliers and encourage them to switch. We want to see a more de-centralised market where innovative smaller suppliers can flourish while helping consumers and communities to generate their own power”, she said.
Meanwhile Clare Francis, editor-in-chief at comparison website MoneySuperMarket, added, “For too long the energy market has been underwhelming in its support for bill payers, and it’s been down to the individual to seek out the best possible deal or suffer the consequences financially.
“Times are changing, but consumers still need to be on high-alert – while the investigation begins immediately we will wait until the end of 2015 for conclusions.
“There are still too many barriers that stop people from switching. We would like to see a radical overhaul of the industry so it works on behalf of consumers, not against them.”
Photo: Thomas (ARRGch)