Big Six challenge watchdog’s approach to energy probe

Firms express concern about probe by the Competition and Markets Authority

The big six energy companies; E.on, EDF, Npower, SSF, British Gas and Scottish Power
Some energy suppliers feel the CMA should take a broader view of the industry

Britain's largest electricity suppliers have challenged the Competition and Markets Authority over its approach to the investigation into the industry.

In separate submissions, the “Big Six” have expressed concern about the CMA exploring the break up of their businesses, pricing strategies and arguments that they face little competition.

They claim that the CMA is failing to give sufficient weight to the effects of Government intervention into the industry and are surprised the investigation does not cover the impact of the volatile wholesale gas market.

The Big Six energy suppliers are made up of British Gas, E.ON, npower, SSE, EDF and Scottish Power.

In its review, the CMA is covering contentious pricing, competition and collusion issues under a series of “harm” headings.

However, some suppliers feel the CMA should take a broader view of the industry.

E.ON wants “intrusive regulation and the political climate” included in the “harm” list, with SSE believing that increasingly complex and

onerous regulatory obligations now filling 777 pages, compared to 120 in 2007, have constrained competition.

The CMA has been taken to task over its claim that opaque pricing and low levels of liquidity mean the market is not functioning efficiently. All of the Big Six reject the argument, maintaining it does not represent a barrier to market entry.

Scottish Power said the CMA’s assertion that vertical integration was not benefiting customers “does not appear credible”.

Centrica, the owner of British Gas, said the “low level of trust” among consumers is the most serious problem

facing suppliers in the retail market. EDF complained about a lack of “customer engagement” and is concerned about customers who are not shopping around.