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Parliament Finally Agrees To Scrutinise Anti-Competitive Structures And Practices Of The UK Energy Market

Mar 27, 2008
Parliament has finally woken up to the reality that never in the history of the British Isles has so much been taken from so many by so few in the UK energy market.

The few in this case are the big 6 electricity and gas suppliers who have sheepishly raised their prices since January by on average 15% - although Scottish and Southern Energy has once again agreed to delay any rise until the spring, no doubt smarting from its rise in market share following a similar strategy last year.

With constituents, both individuals and businesses, up in arms MPs had no option but to ignore the recent OFGEM findings suggesting that the rises were justified and to call for a Select Committee inquiry.

Unlike OFGEM, Select Committees are far more likely to grill the defendants until the tiniest piece of information is laid bare in the public domain. And should any part of this as much as hint at a restriction on competition the Committee will have no hesitation in making a referral to the Competition Commission.

The soon to be disbanded Energywatch, may take some solace from finally standing up to the regulator and getting a result on behalf of the consumer - let's hope its replacement shows the same bravery to continue the struggle.

It's important that this inquiry leaves no stone unturned and that all energy suppliers, particularly the independents, make known each and every anti-competitive practice they have been subject to. E4B, Britain's leading independent electricity supplier to SMEs, for instance, has suffered at the hands of some of the big 6's customer win-back tactics.

Despite OFGEM asking for this practice to stop, claims sales and marketing director Graham Paul, "some suppliers are determined to entice switched away customers into a breach of contract situation. This is done by offering them another win-back contract with undercut short term rates which would have normally be on offer to new customers only to remain with them."

To further scrutinise the big 6 electricity suppliers' practice, OFGEM has announced that it is to conduct a two year long review of its own on the UK gas and electricity networks. This serves as further evidence that the energy regulator is determined to examine whether the current system for governing the regulation of the networks will deliver reasonable prices to household and commercial electricity customers despite growing investment challenges.

However, the body's chief executive Alistair Buchanan stated that the review should not be seen as being critical of the current regime: "the current RPI-X regime has delivered much greater efficiency from the network operators with better quality of service, improved reliability and lower costs to consumers," he explained.

"But we need to know that the regime can continue to promote innovation from the companies at the level that is required for the future."

Perhaps the prospect of a Select Committee hearing will now focus the minds of the big 6 on retaining their customers by fair means, not fowl.

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About the Author
Emma Churchill - Communications Executive - E4B is Britain's independent electricity retail company specialising in the supply of business electricity to small and medium sized businesses. E4Bs aim to offer lower prices to British businesses.
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