Building on the findings of our 2008 Energy Supply Probe, on 26 November 2010 Ofgem announced the Retail Market Review - an investigation into the markets for electricity and gas for households and small businesses in Great Britain. In March 2011, we published our findings and initial proposals.
We find that further action is needed to make energy retail markets in Great Britain work more effectively in the interests of consumers. Consumers are at risk from a number of features in the market which reduce the effectiveness of competition.
We set out our proposals for action. These are designed to make it much easier for consumers to identify who is offering the cheapest tariff; make it easier for new suppliers to enter the market; enforce and strengthen Probe remedies in both the domestic and non-domestic market; and increase the transparency of company accounting practices.
Our proposal to make new entry easier is to improve the ability of the wholesale power market to meet independent participants’ needs. We suggest intervention to improve liquidity, and outline what this would look like. Therefore our March consultation document is also an important next step in our ongoing Liquidity work.
Following the close of the RMR initial proposals consultation in June 2011 we began consulting on a set of proposed remedies for the non-domestic and domestic retail market. The non-domestic consultation closed on 15 February 2012 and the domestic consultation closed on 23 February 2012.
We would prefer to implement reform wherever appropriate with the cooperation of the supply companies. If, following the outcome of our consultative process, we consider that reforms do not have a realistic chance of addressing the concerns identified due to industry opposition or otherwise, we will consider a referral to the Competition Commission.
Our consultation document, supplementary appendices and associated research and discussion papers are available below.