Watchdog clears energy firms of market abuse

BRITAIN’S big energy firms are set to be cleared of abusing their market position.

Regulator Ofgem has spent a year investigating the sector amid claims that the Big Six providers colluded to raise prices and drive up their own profits.

Its early findings, expected before the end of the month, will outline up to 40 changes that the companies may have to make.

But it is likely to stop short of accusing them of abusing their dominance. British Gas, EDF, E.ON, ScottishPower, npower and SSE were accused of stifling the growth of new players in the market by acting together.

But Ofgem, which has delved into the accounts of the firms, has not found evidence of collusion or deliberate profiteering, according to the Financial Times.

The investigation began last June after a political backlash against the industry.

Industry sources have told the Daily Mail that Ofgem will set out possible remedies before issuing its final decision by the year’s end.

The list is expected to be large but it is not expected to include a recommendation to break up the firms – something politicians had suggested.

They had claimed that firms which generated power should not be allowed to sell it onto homes and businesses. But the firms have claimed that they sell their power into a wider market, and buy it back at market rates.

As a result, it is expected that Ofgem will not push the industry to split into generators and suppliers.

It is expected to focus on the shortcomings in the retail market, and could roll back measures brought in under the previous government to try to prevent consumers being baffled by choice or ripped off. The policy which limits energy suppliers to just four tariffs has been blamed for reducing choice for consumers.

The list is also likely to include suggestions for improving switching between providers.

Ofgem’s proposals are also likely to include ways to make it easier for small firms to enter the market by removing several barriers to entry into the industry.

Smaller suppliers now account for 12pc of households.