April 19, 2017 / 10:09 AM / 9 months ago

UK government to take action on rising energy bills - energy minister

LONDON (Reuters) - The British government will flag “decisive action” on rising energy bills when it publishes its response to an investigation by the country’s competition watchdog into the retail energy market, energy minister Greg Clark said on Wednesday.

The government will publish the response to the Competition and Markets Authority (CMA) investigation “very shortly”, Clark, secretary of state for business, energy and industrial strategy, told a parliamentary committee.

But the announcement on Tuesday of a general election in June could mean the response is not finalised before the government enters its pre-election “purdah” period, when it cannot announce significant legislative changes and initiatives.

“It’s one of those categories that when you have an election called, there are a number of things in the final stages of preparation that you need to reflect on whether they can be finalised in time,” Clark said.

The government has said it will release a policy discussion ‘green paper’ on competition in consumer markets this spring, in which measures to address rising retail energy bills are expected.

“Given that the government goes into Purdah next Thursday, any announcement would need to be made in the coming days,” analysts at investment bank Jefferies said in a note.

A transmission tower, also known as an electricity pylon is seen near Cheltenham, western England March 17, 2016. REUTERS/Dylan Martinez

Several energy companies have announced increases in dual-fuel (gas and electricity) annual energy bills over the past six months, which has prompted renewed calls for reform of the UK retail energy market.

A two-year inquiry by the CMA into the market, which concluded last year, stopped short of imposing a widespread price cap, instead proposing a price cap on pre-payment meters, used by poorer households, among other measures.

In February, Britain’s energy market regulator Ofgem said it had the power to cap energy price tariffs but the decision was a matter for the government.

“The response you will see will be muscular and strong and apply to all companies who are disadvantaging consumers in this way,” Clark said.

Many energy firms have said the price rises are due to wholesale price increases and the cost of delivering on government low-carbon policies.

However, Clark said their explanations had not dissuaded him from the action the government will take.

“I don’t want to preempt what our response will be ... but the government intends to act on what is a flagrant mistreatment of customers,” he said.

Reporting by Nina Chestney; Editing by Susan Fenton and Mark Potter

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