MPs call for investigation of energy companies

3rd November 2009

More than 70 MPs have backed an early day motion about energy suppliers.

The EDM calls for a Competition Commission investigation into the relationship between wholesale prices and retail prices offered to consumers by the 'Big Six' energy suppliers, namely British Gas, E.ON, EDF Energy, Npower, Scottish and Southern and ScottishPower.

MPs from all three major parties have signed up since it was tabled last week by Labour's Paul Grogan.

"I do not think that the Big Six energy companies meet together and fix prices but their sheer dominance in the market and the vertical integration of power generation and retail distribution have led to a disconnect between wholesale and retail prices," Grogan told the Daily Telegraph.

"The Competition Commission was set up by Parliament with extensive powers to change the dynamics of a market, for example by removing barriers to entry or even by setting price caps."

Regulator Ofgem has drawn up four energy scenarios of the next 10-15 years which all result in increases in domestic energy bills of between 14 per cent and 25 per cent by 2020 (from 2009 levels).

It is possible that wholesale price spikes could lead to an increase in domestic energy bills of up to 60 per cent in the interim, Ofgem warned.

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