By referring the heavily criticised power industry to the Competition and Market Authority, yesterday OFGEM put in to motion the biggest investigation yet into the energy market. There will be increased pressure on the Big Six as over the next 18 months the spotlight will be on them, as the CMA will determine whether British Gas, EDF, E.on, nPower, Scottish Power and SSE have been profiteering and should be broken up.
OFGEM believe that an investigation will ensure that competition has a positive effect for consumers, by bringing down prices and driving improvements in customer service
Dermot Nolan, OFGEM Chief Executive, said: "Now is the right time to refer the energy market to the CMA for the benefit of consumers. There is near-unanimous support for a referral and the CMA investigation offers an important opportunity to clear the air. This will help rebuild consumer trust and confidence in the energy market as well as provide the certainty investors have called for. The energy market is also going to change rapidly over the next few years with the roll-out of smart meters, the government's electricity market reforms, and closer integration with European energy markets. A CMA investigation should ensure there are no barriers to stop effective competition bearing down on prices and delivering the benefits of these changes to consumers."
The CMA will immediately begin their investigation and are likely to publish final decisions by the end of 2015. The CMA can decide which features of the market to focus on in its investigation and use its powers to address any structural and behavioural issues that would undermine competition.
OFGEM also pledged to carrying on working to protect consumers; continuing to push forward on next-day switching, working on the tools and support available to the most vulnerable of consumers in finding the best energy deal, and ensuring that consumers make the most of reforms to make the market simpler, clearer and fairer.
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