* Ofgem says competition stifled by complex tariffs
* Firms given 8 weeks to reform or face referral to CC
* Says to investigate Scottish Power's credit prices
* To appoint independent accountants to improve disclosure
* Centrica down 0.3 percent, SSE shares off 0.1 percent
(Adds comments from Centrica, analysts; updates share prices)
By Daniel Fineren and Adveith Nair
LONDON, March 21 Britain's energy regulator
Ofgem has told the nation's biggest utilities that they must
offer simpler and fairer tariffs so consumers can more easily
The regulator said competition was being stifled by tariff
complexity and a lack of transparency, and that it had found
evidence that the 'big six' had raised prices in response to
rising costs more quickly than they cut them when costs fell.
Ofgem said it would force these companies to auction off up
to a fifth of the electricity they generate, to make room for
new companies and boost competition. Firms risk facing a
referral to the Competition Commission if they fail to reform,
Britain's big six utilities are Scottish and Southern Energy
(SSE.L), Centrica (CNA.L), Iberdrola's (IBE.MC) Scottish Power,
RWE's npower (RWEG.DE), EDF Energy (EDF.PA) and E.ON UK
(EONGn.DE), which recently sold its UK power networks to U.S.
power firm PPL (PPL.N).
"Consumers have told us that energy suppliers' prices are
too complicated. We are planning to sweep away this complexity
so suppliers' prices are fully exposed to allow easy price
comparisons," the regulator said in a statement.
Mike O'Connor, chief executive of Consumer Focus said
consumers have less confidence in energy companies than in any
other sector: "They feel that prices aren't fair, tariffs are
too complex and that the market doesn't treat them well."
COMPLEX AND UNFAIR
RBS analyst Iain Turner said he was expecting this kind of
measure in the retail markets: "This is just the detail."
Shares in Centrica were down 0.3 percent at 327-1/2 pence,
while Scottish and Southern was off about 0.1 percent at 1,233
pence at 1225 GMT.
Christine McGourty, Director of Energy UK, said Britain has
one of the most competitive energy markets in the world, with
about 100,000 customers switching suppliers every week.
"But some people have never switched, so any appropriate
measures to engage those customers better in Britain's
competitive energy market will be welcome," she said.
Ofgem Chairman Lord Mogg said the companies had eight weeks
in which to "engage constructively" with Ofgem's proposals. "If
firms frustrate reforms, they risk ending up at the Competition
Commission," he added.
Energy Secretary Chris Huhne welcomed the proposals and said
the best possible deal for consumers meant "rough and tough
"Opening up the wholesale market to new entrants will
encourage competition and complement our electricity market
reforms to ensure consumers are getting the best deal," he said.
Phil Bentley, Managing Director of British Gas, which is
owned by Centrica, said the company welcomed any proposals that
further boost competition in the UK energy market.
"In particular, we welcome Ofgem's proposals to improve
electricity market liquidity and transparency in the reporting
of company returns," Bentley said.
Ofgem also announced an investigation into Scottish Power
over a "significant" difference between the company's standard
and direct debit tariffs and said it was exploring whether it
needed to bring similar actions in the non domestic market.
(Reporting by Adveith Nair, Daniel Fineren and Simon Falush;
Editing by Will Waterman and Louise Heavens)