The Competition and Markets Authority (CMA) have announced that they have extended the deadline for their energy investigation by six months although it aims to publish its provisional decision on remedies in January 2016 with a view to reaching its final decision by the end of April 2016.
After the publication of the initial findings in July, several suppliers were prompted to question some of the assumptions, analysis and remedies suggested by the CMA.
Centrica were vocal about their doubts after the CMA claimed that the big six were overcharging and taking advantage of disengaged customers. Centrica stated that it has “serious concerns” about the validity of the assumptions, which drive the provisional findings, branding them “inconsistent with commercial reality” and claiming that they would fail to stand up to rigorous peer review.
“We do not believe that the analysis of profitability and margins in the provisional findings is sufficiently robust to support a conclusion that excessive profits are being earned in retail markets,” Centrica said.
The CMA said they now need to take time to digest the many detailed responses received from suppliers, consumer groups, government and regulators to its findings and admitted that this will lead to a change in its analysis.
Roger Witcomb, chairman of the energy market investigation, explains:
“We now need to refine our analysis in the light of the many responses we have received, to design potential measures that are effective and proportionate to remedy each possible issue, and then to consult widely on those potential measures. This is a huge programme of work and we have concluded that we could not complete it by the original statutory deadline.”
“This investigation – and the measures that could result from it – will have long-standing consequences for millions of customers in an industry of vital importance to the whole country. As the most comprehensive investigation into the energy market since privatisation, this is a once-in-a-generation opportunity to shape the future of this market for the better. It’s important that we get it right.”
Well we’re glad to hear it Roger. We ourselves had some doubts over some of the proposed remedies – price caps on suppliers’ default tariffs to limit the price hikes on disengaged customers. We believe education is required and trust needs to be built between supplier and customer.
The energy market should remain as the name suggests and not be run by an Ofgem managed comparison service. Customers should have the right to choose their broker and trust they are getting the best deal.
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