(Recasts, adds details, background, Which? comment)
LONDON, June 26 (Reuters) - Britain’s competition authority launched an investigation of the country’s biggest energy suppliers on Thursday after industry regulator Ofgem said the market was not competitive enough.
Six suppliers - SSE, Scottish Power, Centrica, RWE npower, E.ON and EDF Energy - control 96 percent of the market and are under intense scrutiny ahead of a national election next year because of public outrage over continuously rising energy bills.
The Competition and Markets Authority (CMA) is expected to report its findings by Dec. 25, 2015 and could go as far as enforcing the break-up of energy suppliers if it finds they are breaching competition rules.
“The CMA will now carry out its own comprehensive, independent investigation to see if there are any features of this market which prevent, restrict or distort competition and, if so, what action might be taken to remedy them,” the CMA said in a statement.
Ofgem said in March that it had found signs of tacit price coordination among the biggest suppliers and asked the CMA to focus on issues it identified in its own probe, including the relationship between the supply and generation businesses of the big six suppliers, and their profitability.
“The investigation must leave no stone unturned in establishing the truth behind energy prices,” said Richard Lloyd, executive director at consumer group Which?
The energy industry said it welcomed the investigation because it offered an opportunity to set the record straight on allegations that big suppliers have abused their dominant market position to overcharge customers.
Suppliers are currently facing renewed pressure to reduce consumer bills due to a steep decline in wholesale prices, which make up around half of the cost of an average energy bill.
“The competition inquiry will allow us to put to bed the toxic debate and shine a light on the progress the industry has already made,” said Angela Knight, chief executive of EnergyUK, Britain’s energy industry lobby group.
Reporting by Karolin Schaps; editing by Sophie Walker