Britain’s competition watchdog, the Competition and Markets Authority (CMA), is expected shortly to clear the country’s “big six” power companies of market abuse.
The report is also likely to rule out the break-up of these vertically integrated groups and roll back energy reforms introduced by the Office of Gas and Electricity Markets (Ofgem). Instead, it is expected to take a swipe at Ofgem, its fellow non-ministerial body, for holding back competition in electricity and gas markets.
The issue of energy reform was re-ignited by Ed Miliband, the former leader of the Labour Party, at the tail-end of 2013 when he said that if his party won power in the May 2015 general election he would freeze energy prices for a period of 20 months. He also said he would look at breaking up the big six that dominate the industry with 85% of the market -- EDF Energy, SSE (LON:SSE), British Gas, part of Centrica (LON:CNA), Scottish Power, EON and RWE Npower.
The CMA started its 12 month-long investigation in June last year. It is now expected to say in its provisional findings that vertical integration does not lead to higher prices.
It is also likely to criticise Ofgem for limiting competition among companies by killing off the practice of door step selling after it found abuses.
This restriction was introduced in 2011 as a market reform and backed by the prime minister David Cameron.
Another of the reforms introduced by Ofgem, to limit companies to offering just four tariffs to customers to avoid confusion will likely come in for some flak from the CMA. Instead, the CMA is expected to focus on encouraging customers to switch suppliers.
The CMA found in a preliminary report in February that virtually all households -- 95% -- had missed out on potential savings by not switching.
The CMA is expected to suggest a number of proposals to encourage customers to find alternative sources of supply.
The proposals are provisional before a final report is made at the end of the year after further wide-consultations.