Ofgem inquiry into energy prices

Ofgem is to begin an investigation into energy companies after a 38% increase in prices since September.

The watchdog has said it will review the effectiveness of the retail energy market to see if action is needed to protect consumers.

The latest analysis of retail prices by Ofgem shows that the margin on a standard dual fuel tariff has risen from £65 to around £90.

In its Electricity and Gas Supply Market Report published today, Ofgem finds that three of the Big 6 energy supply companies have already announced further price rises this winter. Only one supplier so far, EDF Energy has promised to freeze prices between now and March 2011.

Ofgem says it has no problem with firms making a profit but it wants to see clarity for consumers that the market is transparent and working as effectively as possible.

As part of the review, Ofgem will investigate the retail accounts it has recently received under new licence requirements.

Ofgem's chief executive, Alistair Buchanan, said: "With Britain facing an investment bill of £200 billion over the next 10 years, consumers have the right to expect that the energy retail market is providing them with value for money.

"Our analysis published today shows and increase in company margins from £65 to £90 at a time of rising energy prices, which causes Ofgem to rightly ask if companies are playing it straight with consumers."

The regulator's investigation will assess the current state of the effectiveness of the retail energy market, review the companies' progress on implementing earlier reforms and report on retail and wholesale prices.

This review is due for completion in March next year. Alison Brown


ofgem | gas


Energy efficiency & low-carbon
Click a keyword to see more stories on that topic, view related news, or find more related items.


You need to be logged in to make a comment. Don't have an account? Set one up right now in seconds!

© Faversham House Group Ltd 2010. edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.