Energy Market Investigation Report

[ALEO Admin]

The provisional findings report of the Competition and Markets Authority energy market investigation was published on 10 July 2015.

The summary report was published on 7 July 2015, along with a Notice of Possible Remedies.

The report says that dual fuel customers could save an average of £160 a year by switching to a cheaper deal, with about 70% of customers currently on the ‘default’ standard variable tariff.

According to the report "Regulatory interventions designed to simplify prices, such as the ‘four-tariff rule’, are not having the desired effect of increasing engagement, and have limited discounting and reduced competition."

The CMA proposes that the regulatory approach to the retail market should be based on clear principles that allow the benefits of competition to be gained and promote measures, such as smart meters. Alongside this, the CMA will also be considering whether safeguards such as a transitional price cap on the most expensive tariffs are needed to protect customers until other measures have led to a more competitive market.

However, the BBC have reported that this idea seemed to have been dismissed by the government with a 10 Downing Street spokeswoman saying "The prime minister does not think that price regulation is the right approach." See http://www.bbc.co.uk/news/business-33420734

The CMA has provisionally found that competition in the wholesale gas and electricity generation markets works well, and the presence of vertically integrated firms does not have a detrimental impact on competition. It has also found that there is no strong case for returning to the old ‘pool’ system for the wholesale electricity market.

See https://www.gov.uk/government/news/cma- ... ket-reform form more information.

To download all the related documents, visit:
https://www.gov.uk/cma-cases/energy-mar ... ngs-report