Ofgem steps up energy firms probe
24th August 2011
Energy regulator Ofgem has hired specialist accountants from BDO to investigate how the big six gas and electricity suppliers calculate their profits.
The forensic accounting specialists are charged with the task of examining the trading profits, wholesale prices and hedging practices of British Gas, E.ON Energy, EDF Energy, Scottish Power, Npower and Scottish & Southern Energy.
They are doing this to determine if profits at the companies' retail arms have been underestimated in order to justify higher gas and electricity prices.
The measure is part of an investigation launched by Ofgem in March, after the regulator revealed it had evidence to suggest that the major energy suppliers had raised prices to offset rising costs more quickly than they reduced them when costs fell.
At the time, Ofgem vowed to look into the "facts behind the numbers".
The decision to hire the accountants was taken to improve transparency over the pricing decisions made by the six companies and give consumers a clearer indication over how retail prices relate to wholesale energy costs.
Copyright © Press Association 2011
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