Energy regulatory body Ofgem will be investigating claims that one of the leading energy suppliers SSE has been leveraging its market dominating position to reduce competition and unbalance the scales of business. The new connection market is valued at roughly £500 million annually and plays a large part in the successes and failures of the energy industry In the UK.
The investigation is based on how new customers choose where their electricity and gas will be coming from. New housing developments have a choice over who they wish to supply them, but larger energy suppliers can create monopolies around these contracts. Another issue is customers being unaware which parts of their energy supply must be handed by a certain supplier, and which can be given to a supplier of their choice. This frustration of competition may even be costing the customers more, as well as preventing businesses from transacting fairly.
Alongside this investigation, Ofgem plans to put a new Code of Practice into place by February this year. This code will be agreed to by the major and minor suppliers and will ensure that no barriers to competition will be created by any of them, and that local customers will have access to whichever energy network they choose.
Ofgem was quick to point out that an investigation does not mean that there is any proof or suggestion of a breach in competition law, merely that they had concerns that needed to be addressed. Ofgem also have pointed out that this is a good opportunity to review local and national level competition practices and use this as a springboard to fill in any gaps and fix any potential issues that they find within the energy supply system.
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