Energy firms to be investigated
The energy regulator, Ofgen, has asked the Competition and Markets Authority (CMA) to investigate Britain's energy companies in an effort to restore trust in the industry after public uproar over rising fuel bills.
Ofgen want the CMA to decide "once and for all" whether the big six suppliers' rises in prices and profits were due to lack of competition.
The suppliers – Centrica (which owns British Gas), SSE, RWE npower, E.ON, Scottish Power and EDF Energy – control 95% of the market for retail supply.
The regulator said its own review had found that consumer trust had fallen and there was no clear evidence that companies had tried to cut their costs while retail bills more than quadrupled in three years.
Ofgen said it found that 43% of customers distrusted energy companies to be clear and honest about prices and that suppliers' retail profits had risen to £1.1bn in 2012 from £233m in 2009. Suppliers were accused of consistently set higher prices for existing consumers over those who have switched.
Ofgen had been under pressure after campaigners and politicians accused it of allowing suppliers to increase charges while using opaque pricing that discriminates against existing customers.
Last month the regulator ordered the companies to pay back an estimated £400m left in closed customer accounts. It also required them to publish more information about trading between their generation and retail businesses.
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