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Britain to enforce greater scrutiny of utilities to open up energy market
February 26, 2014 / 11:11 AM / 4 years ago

Britain to enforce greater scrutiny of utilities to open up energy market

* “Big Six” to publish long-term prices from March 31

* Face financial penalties if they do not comply

By Nina Chestney

LONDON, Feb 26 (Reuters) - Britain’s main energy suppliers will have to disclose long-term power prices twice daily from next month under rules to be enforced by regulator Ofgem aimed at encouraging new entrants into a fairer energy market.

From March 31, Britain’s six largest energy suppliers - Centrica-owned British Gas, SSE, EDF, RWE npower, E.ON and Scottish Power will have to publish twice daily wholesale power prices for as far as as two years ahead or face penalties.

“These reforms give independent suppliers, generators and new entrants to the market, both the visibility of prices and opportunities to trade that they need to compete with the largest energy suppliers,” Andrew Wright, Ofgem’s chief executive, said in a statement.

“Almost two million customers are with independent suppliers and we expect these reforms to help these suppliers and any new entrants to grow,” he said.

The issue of rising energy bills has dominated the political agenda since opposition Labour leader Ed Miliband promised to freeze energy bills for 20 months if he wins power in a 2015 election.

Political parties are competing with one another to be seen to be tough on what they say are unfair price rises.

This month, British Energy Secretary Ed Davey said former gas monopoly British Gas might be broken up to put a stop to excessive profit margins, responding to a review by regulators.

Ofgem, the Office for Fair Trading and the Competition and Markets Authority have been carrying out an investigation into competition in Britain’s energy retail market, looking at prices, profits and barriers to entry.

Davey said on Wednesday that making prices more transparent will help reveal how the “Big Six” companies trade and make it easier for competitors to challenge their business model.

However, SSE’s chief executive Alistair Phillips-Davies said that although the firm welcomed Ofgem’s new rules, “all measures should apply to every player in the market to ensure there is a more liquid and transparent market for all”.

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