Ofgem to review retail energy market

ENERGY regulator Ofgem is to launch a review of the UK’s energy retail market today after flagging concerns that suppliers are charging too much.

Its latest analysis of retail prices shows the margin on a standard dual fuel tariff is now about £90, up 38 per cent from September’s level of £65.

Ofgem said that while it expects energy companies to be profitable, it wants to clarify whether the market is transparent and protects consumers enough.

“Consumers have the right to expect that the energy retail market is providing them with value for money,” said Chief executive Alistair Buchanan.

He said the rise in company margins at a time of rising energy prices “causes Ofgem to rightly ask if companies are playing it straight with consumers.”

The review will go beyond Ofgem’s regular quarterly price reports to review the retail market overall and how recent reforms are affecting consumers.

It will assess how effective the retail market is as well as how comprehensively energy suppliers have implemented Ofgem’s reforms.

It will investigate “the facts behind these numbers,” Buchanan said, and should be completed by March 2011.

Ofgem’s Electricity and Gas Supply Market Report found that three of the “Big Six” Uk energy suppliers have already announced price rises for the winter.

RWE Npower and Eon are still to announce whether they will raise prices while EDF Energy has pledged to fix its prices until March 2011.