The energy regulator, Ofgem, has launched an investigation into the electricity and gas markets for households and small businesses. There has been concern about whether the market is working effectively. Consumer groups and unions have criticised British Gas owner Centrica for announcing large increases in profits after putting up bills. Ofgem says it currently has no evidence of anti-competitive behaviour but is responding to customer worries. “The decision to conduct the probe is in response to public concern about whether the market is working effectively,” Ofgem chief executive Alistair Buchanan said. We hope it will shed light on how the energy market fails consumers and what can be done to fix it. “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,” he added. If Ofgem finds problems it could refer the matter to the Competition Commission for further investigation.

“Consumer concerns have demanded this sort of response. We hope it will shed light on how the energy market fails consumers and what can be done to fix it,” Adam Scorer, Director of Campaigns at Energywatch said. There have been 15 inquiries into the energy market in the last 7 years and each of them has given the industry a clean bill of health. It is concerned that the reduction in the number of suppliers from 20 to six has reduced competition.

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