Suppliers respond to energy market investigation
The big six have welcomed the in-depth investigation, despite its potential to revolutionise the market and significantly cut profit margins
Following yesterday’s announcement that Ofgem has put the Competition and Markets Authority in charge of an in-depth investigation into the energy sector, a number of suppliers have responded positively.
The CMA’s investigation is set to explore allegations of price collusion and the ‘self-supply’ practice carried out by the big six energy companies. The latter refers to a supplier’s energy generation branch selling energy to its retail branch and potentially distorting market prices.
The investigation is set to take 18 months and represents one of the most extensive studies into the energy industry.
‘Another step towards restoring confidence’
Speaking on Ofgem’s announcement, Sam Laidlaw, CEO at British Gas’ parent company Centrica said: “We want an energy market that is trusted by customers, and we believe that an in-depth and thorough review by an independent and respected authority can help to achieve this.
“British Gas now has more than 1 million smart meters installed in our customers’ homes, demonstrating our commitment to putting customers in control of their energy usage and bills.”
E.ON’s Chief Executive Tony Cocker also welcomed the investigation and said: ” Since we first called for a full market investigation in 2011, our position on this matter has been consistent and it is hoped that with this process we can all take another step along the road towards ensuring clear outcomes and restoring confidence.”
Independent suppliers happy with investigation…
Ian McCaig, CEO of independent energy provider First Utility, said: “First Utility welcomes Ofgem’s call for a full review by the CMA, something we think is essential to address structural issues that currently distort the market in favour of the big six.
“Promoting competition and engaging consumers is the only way to provide choice and fair value to consumers to ensure they get a better deal.”
…but call for more to be done now
McCaig added that although the review was a positive step forward for the industry certain barriers to competition should be tackled now. Amongst the suggested changes, McCaig highlighted prohibiting self-supply.
He also called for Ofgem to make switching supplier easier for consumers and urged a rethink of recently implemented rules in relation to the number of tariffs energy suppliers can offer. Ofgem’s Retail Market Review (RMR) limited the number of plans providers can offer consumers in a bid to simplify the market, however, McCaig argues that this has also reduced the number of choices on offer.