22 February 2008
Energy market regulator Ofgem has announced plans to investigate the electricity and gas markets for households and small businesses.
The regulator said that while it had no evidence that competition in the market was failing it was aware that consumers had become concerned.
Ofgem Chief Executive Alistair Buchanan 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."
The probe will be carried out under Ofgem's Enterprise Act powers which will give the regulator access to detailed information that is not routinely made available. It used the analogy that it would be replacing a magnifying glass with a microscope.
The investigation will look into the relationship between retail and wholesale energy prices; barriers to customers switching gas and electricity supplier; how competitive prices to different types of customers are; and whether it is difficult for new suppliers to enter the market.
Ofgem is already looking at tariffs for prepayment customers and those who do not pay their energy bill by direct debit.
© 2008 Adfero Ltd
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