Britain’s energy fatcats have been accused of failing customers – by not passing on falling prices.
The head of the industry regulator says competition among the Big Six firms should have led to “at least” two
cutting bills by now.
But none has – despite around eight months of sharply falling wholesale gas and electricity costs.
Ofgem chief Dermot Nolan said: “I am concerned about this and about the lack of competition this would appear to show.”
Those concerns were one reason Ofgem referred the energy industry to the Competition and Markets Authority in March this year.
The investigation, the most wide reaching since privatisation, will also look at bumper profits raked in by energy giants.
The Big Six made more than £3.2billion from generation and falling supply costs could mean suppliers make £105 profit from the average dual fuel customer over the next 12 months.
Mr Nolan, giving his first newspaper interview since becoming Ofgem chief executive in February, also said supply businesses need not make a profit.
“We have told the competition authorities that we should be looking at profits in the round,” he revealed.
“These companies have supply and generation businesses together and I am absolutely of the view that they should be looking at their own
profitability and making pricing
decisions based on that. If a retail
business isn’t making a profit and is a standalone it probably won’t last.
“But if the retail business isn’t making a profit and its generation business
is making a lot, then I have no
problem with that.”
Trust in energy suppliers is at rock bottom after a surge in prices.