LONDON (Reuters) - Britain’s largest energy suppliers would be forced to disclose prices at which they trade electricity up to two years ahead under proposals made by the country’s energy regulator on Wednesday aimed at loosening the firms’ grip on the power market.
If the reforms are passed, suppliers will have to reveal prices for long-term contracts on trading platforms which the regulator hopes will give easier market access to smaller energy firms.
Britain’s ‘big six’ suppliers are Centrica’s British Gas, EDF Energy, E.ON, RWE’s npower, Iberdrola’s Scottish Power, and SSE, which control about 99 percent of the power market.
“Ofgem’s proposals will break the stranglehold of the big six in the retail market and create a more level playing field for independent suppliers,” said Andrew Wright, senior partner for markets at regulator Ofgem.
The proposal is part of the watchdog’s wider reforms to open up the electricity market and boost liquidity including an obligation on producers to sell 20 percent of supply in the open market instead of through bilateral deals.
Britain’s utilities are already trading up to 30 percent of their output in the short-term market but liquidity and price transparency in the futures market is still lacking, Ofgem said.
The big six companies are often accused by the British public of using their competitive advantage to charge high energy prices although the latest EU-wide comparisons showed that British households pay below-average prices for electricity and gas.
In parallel reforms Ofgem is urging suppliers to offer customers their best available energy tariffs and to reduce the amount of complex offers.
“An increased role ...for independent suppliers and generators is precisely what will help drive the competition that delivers better value for consumers and businesses,” Energy Secretary Edward Davey said in a statement.
His ministry is currently pushing a separate electricity market reform package through Parliament that he says can also improve market liquidity if Ofgem’s proposals are delayed.
Reporting by Karolin Schaps and Rosalba O'Brien; editing by Paul Sandle and Jason Neely