Ofgem goes ahead today with its promised referral of the energy market to the Competition and Markets Authority (CMA).
The energy watchdog says an investigation is the best way to ensure, once and for all, that competition works effectively for consumers.
Ofgem chief executive Dermot Nolan 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 move follows analysis of the state of competition in the household and small business markets by Ofgem, the Office of Fair Trading and the CMA. Areas covered by the assessment included “possible tacit coordination” in the timing and size of price announcements by suppliers, and falling levels of customer switching.