During yesterday’s four-hour Energy Select Committee hearing, energy bosses from the big six were questioned over recent price rises and their profit margins.
Chief Executive of E.ON, Tony Cocker, called for a full investigation into the market to clear energy firms of any allegations of profiteering. The move echoes a similar proposition put forward by EDF earlier this month.
Cocker said he had written to Prime Minister David Cameron to ask him to launch an investigation.
He added that Labour’s promise to freeze prices had already contributed to raising the long-term cost of energy prices.
Full investigation into the sector to regain consumer trust
Andrew Wright, acting head of energy regulator, Ofgem, told the Committee a full investigation into competition in the market would take place and findings published in spring 2014.
“We will look at all aspects that affect competition in the market,” he added.
‘The market is competitive’
However, a spokesperson for Centrica, the company which owns British Gas, said a full inquiry would not be useful.
They said: “We believe it unnecessary as the market is competitive, there have been numerous inquiries into the energy market and none have found any evidence of anti-competitive behaviour.
“However, if it’ll take another inquiry to improve trust then we are supportive.”
At present, four of the big six – British Gas, npower, SSE and ScottishPower – have raised their prices by an average of 9.1% and come under fire from large sections of the public, politicians and media.
The remainder of the large energy companies, EDF and E.ON, are expected to implement their own price rises.
Gas prices have fallen in the past two years
Stephen Fitzpatrick, chief executive of Ovo Energy, one of the UK’s independent gas and electricity suppliers, said he could find no explanation for recent energy price hikes.
“We buy all of our power and gas on the wholesale market and […] the most expensive price we have paid for wholesale gas in the last four years was in May 2011, for the following winter – that was 74p a therm,” he said.
“Since then it has been below 72p a therm for this winter, last winter and next winter. We are buying gas for next winter at a current price of 69p a therm.”