DCP228 and Business Electricity
What is DCP228? DCP228 is a regulation to be introduced by Ofgem in April 2018 which will change the way busin...Read More
The findings of an investigation into the energy industry are to be delayed, provisionally until January 2016. What does this mean for your business energy?
The Competition and Markets Authority’s (CMA) investigation has been extended by 6 months from 25 December 2015 to 25 June 2016, 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, the CMA said on its website.
The delay is partially due to the many “detailed responses” received from suppliers, consumer groups, the Government and regulators to the provisional findings and range of potential ‘remedies’ published in July (our analysis may help clarify the technicalities).
The review may have far reaching implications: remedies could go as far as enforcing the break-up of energy suppliers if it finds they are breaching competition rules. “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,” said Roger Witcomb, Chairman of the energy market investigation.
With so much at stake, the CMA wants to ensure it has sufficient time to combine analysis of responses with further evidence-gathering, aiming for “as comprehensive a solution as reasonable and practicable”.
The CMA’s provisional findings identified a large number of areas where there might be a competition problem, including a possible lack of consumer engagement in both domestic and microbusiness sectors, the ‘four tariffs rule’, the Department of Energy and Climate CHange’s (DECC) processes for allocating clean energy subsidies, the industry’s gas and electricity settlement systems, the roles of Ofgem and DECC in regulatory decision-making, locational pricing of electricity, and energy code governance. “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,” Witcombe added.
“This is a huge programme of work and we have concluded that we could not complete it by the original statutory deadline. We have therefore decided there are special reasons for extending the reference period which will allow us some extra time to finish the job.”
Better regulation is long overdue in the business energy sector, as SwitchMyBusiness.com has previous argued. The delay to the publication of findings shows how complicated action in this area can be. Enforcing remedies could be even more time consuming.
In the meantime, many small to medium sized businesses are missing out on lower energy prices. To compare business energy suppliers can take just 20 minutes: give us a call on 0330 0100 251 (or request a call back using our form).
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