Ofgem to probe energy prices
Energy watchdog Ofgem will scrutinise the books of power companies to check whether recent price hikes are justifiable.
In March this year, Ofgem said that it was ‘concerned’ about the pricing behaviours of the ‘Big Six’ energy companies and promised to review their accounts.
Today (August 22) Ofgem has appointed forensic accountants BDO to look at whether increases of around 18% for gas and 11% for electricity are justified by wholesale price rises.
Last week npower became the fifth member of the ‘Big Six’ to raise prices.
A spokesman for Ofgem said: “We have appointed accountancy firm BDO to provide recommendations on how best to improve accounting disclosures by energy suppliers.
“This follows Ofgem’s review of the retail market earlier this year, which identified the need to improve accounting transparency to give consumers more clarity about how retail prices relate to suppliers other costs.”
BDO is due to report back to Ofgem around the end of this year the watchdog is then due to publish findings and any recommendations for further action in 2012.