Ofgem Investigating The Big Six

Ofgem Investigating Britain’s Big Six Utilities Suppliers

Britain’s energy regulator, Ofgem Investigating The Big Six utilities suppliers, also known as the Big Six, under the accusation of miss leading marketing information and unfounded energy and gas prices rises. Severe retail reforms have been proposed which could oblige them to auction more than one fifth of the energy they produce.

Back in March when the investigation started, Ofgem threatened it was to report to the Competition Commission suppliers who weren’t willing to cooperate with the investigation. After three months of investigation the energy regulator said suppliers were cooperating well and that it was unlikely any of them would be referred to the Competition Commission.

But Ofgem hasn’t dismissed the threat completely if suppliers fail to comply with reforms when they come into place at a later stage.

Smaller suppliers are the ones cooperating the most which is the case of First Utility who is in favour of full production auctions to prevent large utilities from supplying and producing power at the same time.

Ofgem proposed that 20 percent of the power produced by the Big Six should be auctioned due to the excessive rise in energy and gas prices over the past year in order to ensure consumers receive a fair deal.

These reforms should be implemented sometime next year but since some people think the percentage of the power production auctioned must be higher, Ofgem is undertaking further investigation as stated by a spokesman for the energy regulator:

“Some people think the figure should be higher so we’re undertaking further analysis and will come up with an impact analysis later this year. It’s important to us that the volume is efficient enough to have an impact on liquidity,”

According to Ofgem it is more important than ever to ensure consumers are protected by the constant rises in energy prices. On Wednesday Ofgem’s research showed that wholesale gas and energy prices gains will result in a 15 pound rise in energy bills for consumers over the next year.

Gas contracts for winter 2011/2012 are 30 percent higher than last winter’s wholesale gas prices. That is understandable to certain extent due to the unrests in the Middle East, North Africa and the Japanese Earthquake/Tsunami catastrophe.

“I want to see more clarity in billing to help consumers shop around and switch to the best deal. We are also working with Ofgem to sweep away the barriers to new companies entering the energy market so consumers can benefit from greater competition,” said Britain’s Energy Secretary Chris Huhne.

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