CMA investigation concludes energy firms have been overcharging us for years
It’s only taken just over a year, but the Competition and Markets Authority (CMA) has today published the preliminary findings of its investigation into the energy market and has concluded, as a huge surprise to no-one, that the big six energy suppliers "overcharged" millions of energy customers to the tune of £1.2bn a year.
The investigation got underway in June last year and the report refers specifically to the energy prices between 2009 and 2013. The CMA reckon that the big six energy firms reportedly charged households 5% more than they would have done in a competitive market. The big six are British Gas, E-On, Npower, EDF Energy, Scottish Power and SSE.
Over the past ten years, the CMA have calculated that gas and electricity prices have risen by 125% and 75% respectively; however they also believe that much of the increase in recent years has been down to environmental and network costs rather than actual price rises of the energy supplies themselves.
Despite having concluded that dual fuel customers could save an average of £160 a year by switching, the CMA do not think that the recent reforms by the energy regulator Ofgem to encourage switching – principally by reducing the number of tariffs on offer to reduce consumer confusion - have had the desired effect. The CMA are therefore proposing certain measures to protect customers from the evil energy giants. These measures include introducing a transitional price cap, while reforms are made to the energy market, and ensuring prepay meter customers- who currently pay even more through the nose than the rest of us- are the first to get smart meters in the scheduled national roll out. The CMA also want to see the end of automatically rolling-over energy contracts.
The investigation, which involved around a dozen site visits, 30 hearings and more than 100 submissions, will now continue with the CMA seeking to consult on these proposals and "remedies" and publish final recommendations before the end of the year.