Ofgem to launch energy probe
The energy regulator Ofgem has said it will be launching an investigation into the markets in electricity and gas for households and small businesses.
3i confirm bid for Novera EnergyThe news comes on the same day that British Gas owner, Centrica Plc posted a 40 per cent rise in operating profit for 2007.
In January of this year Centrica announced a 15 per cent price hike for gas and electricity, saying it was necessary to for the company to remain profitable in the face of rising wholesale energy prices.
Alistair Buchanan, Ofgem chief executive said, "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."
Buchanan said that Ofgem kept the market under constant surveillance and said there was no clear evidence that the market was failing.
"Nevertheless," he said, "Recent events in the market have increased public concern and have damaged customers' confidence that competition is working well and giving them a good deal. Customer confidence is vital for a well-functioning market. So we shall replace our magnifying glass with a microscope and take a more detailed look at the retail market and the influence of global wholesale market developments.
"The detailed probe we are now launching will investigate whether the market is working well for all energy customers and not just particular groups such as those who are on the cheapest online deals. Customers certainly should not stop switching as there are still big savings to be made by changing your price plan, your supplier and the way you pay."
The investigation will be carried out using Ofgem's Enterprise Act powers, which allow the regulator access to information that is not routinely available.
The European Commission has said it will collaborate with Ofgem during the investigation to ensure that Ofgem is kept fully informed on other European energy markets.
In January Ofgem gave assurances that it had seen no evidence of price fixing by suppliers. The regulator said that it still had no such evidence.
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