British regulators are set to carry out a full investigation into the UK’s biggest energy suppliers amid public anger over high utility bills.
The competition probe has been launched because of concerns that there’s been coordination of prices.
The regulators said competition is so weak and public trust so low that an investigation is needed.
They pointed out that between between 2009 and 2012 retail profits in the energy sector rose to 1.1 billion pounds (1.33 billion euros) from 233 million pounds. That was an almost fivefold increase.
The companies – SSE, Scottish Power, Centrica, RWE npower, E.ON and EDF Energy – have denied accusations by the opposition Labour party that they are ripping-off customers.
The biggest, Centrica, rejected any suggestion of tacit coordination on prices with other suppliers and warned the threat of a break-up would likely result in lower investment.
The investigation could result in the biggest shake-up of Britain’s retail energy market since it was opened to competition 15 years ago.
Regulator Ofgem said a public consultation would run for eight weeks until the end of May before a final decision is made on referring the sector for investigation.
The competition watchdog has 18 months to carry out the probe and can request a six-month extension if needed, pushing the outcome of the investigation well beyond next year’s May election.