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Regulator Ofgem has today referred the energy market to the Competition and Markets Authority (CMA) for a full investigation, claiming major changes to the energy market are imminent.
Following a consultation in March, Ofgem says it wants to ensure that competition works effectively for consumers by bearing down on prices while driving improvements in customer service and innovation.
The regulator says the investigation will also help to rebuild consumer trust and provide confidence for investors.
Dermot Nolan, Ofgem chief executive, said: “Now is the right time to refer the energy market to the CMA for the benefit of consumers. There is near-unanimous support for a referral and the CMA investigation offers an important opportunity to clear the air. This will help rebuild consumer trust and confidence in the energy market as well as provide the certainty investors have called for.
“The energy market is also going to change rapidly over the next few years with the roll-out of smart meters, the government’s electricity market reforms, and closer integration with European energy markets. A CMA investigation should ensure there are no barriers to stop effective competition bearing down on prices and delivering the benefits of these changes to consumers.”
According to Ofgem, the CMA will begin its investigation immediately and is likely to publish final decisions by the end of 2015.
The CMA can decide which features of the market to focus on in its investigation and use its powers to address any structural and behavioural issues that would undermine competition.
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