LONDON (Reuters) - A probe into possible price manipulation in Britain’s gas market, Europe’s largest, could result in tighter regulation of energy trading, Angela Knight, chief executive of the EnergyUK lobby group, said on Friday.
“We need to see whether there is any more that needs to be done so there’s the proper regulation in place to secure confidence in the market,” said Knight, who moved to EnergyUK in September after heading the British Bankers’ Association (BBA).
Britain’s financial and energy regulators announced this month that they were reviewing information received by a whistleblower claiming that traders had manipulated prices in Britain’s gas market.
Knight said some of the price manipulation issues alleged in the case would be addressed by new EU rules being rolled out to prevent market abuse in electricity and gas markets, also known as REMIT.
Yet she said the case was also somewhat unusual as the whistleblower had refused the customary identity protection and opted to speak about the allegations in public.
He also approached the financial regulator rather than energy watchdog Ofgem.
“I think that has therefore made it quite difficult for our authorities (...) The fairness about the British system is you aren’t found guilty until the work has been done to determine whether you are guilty,” Knight said.
Ofgem has often been accused of lacking prosecution powers compared with other regulators, but Knight said the energy watchdog had been keeping a close eye on unusual trading.
Knight, who spent five years at the helm of the bankers association, likened the energy market to the banking sector in that both sectors are going through major change.
Britain’s banking sector is facing growing scrutiny on the back of the financial crisis and the energy market is set to be overhauled to encourage more low-carbon power generation.
“There are some evident parallels in that these are large important industries for the UK economy,” said Knight, whose role it was to defend the banking sector at a time when it was widely blamed for causing global financial meltdown.
In her new role Knight said it was part of her job to restore reputation of energy companies which are often criticised for pocketing hefty profits for electricity and gas supply.
“A lot of the good can be completely sidelined by a small amount of the bad and I think that’s a shame,” Knight said, adding that EnergyUK was considering launching a public campaign to raise the profile of energy companies.
“If we’re going to have that honest discussion with our customers, it has to be the industry, regulators, policymakers and the media, too, to find a way to explain which doesn’t end up in finger pointing.”
Editing by Jason Neely