'Radical overhaul' for Britain's gas, electricity market

Rising energy prices have prompted Britain’s energy regulator to move forward with a “radical overhaul” of the retail gas and electricity market.

Ofgem says the overhaul is based on wide support from both consumers and organizations like Consumer Focus, Which?, CAB, Age UK and uSwitch, along with independent generators and small energy suppliers.

“Responses to our reforms show that there is increasing consensus across a range of consumer and business groups that in a period of rising energy prices energy suppliers have to transform the way they deal with consumers,” said Alistair Buchanan, Ofgem’s chief executive. “We are also seeing signs that the penny has dropped with the Big Six and they are ready to take part constructively in the debate.”

The Big Six are the half-dozen energy companies that dominate the UK market: British Gas, EDF, E.ON, npower, Scottish Power and Scottish & Southern Energy.

Buchanan said Ofgem will press ahead to “sweep away complex tariffs in order to expose energy suppliers’ prices to consumer power. We will also pursue breaking up the stranglehold of the Big Six on the electricity market to encourage more firms, like new arrival the Co-op, to enter the energy market and increase the competitive pressure on the Big Six.”

The need for reform is greater than ever with turmoil in global energy markets and wholesale prices up by 30 percent since December 2010, he added.

Ofgem today also launched an Enterprise Act investigation into Scottish Power over potentially misleading marketing at the time of its recent price rise.