Regulator threatens crackdown on commercial energy suppliers

Regulator threatens crackdown on commercial energy suppliers

Energy regulator Ofgem has warned of a crackdown on the major energy suppliers amid accusations of ‘predatory pricing’ tactics.

In a move which could impact on business electricity prices and gas tariffs, Ofgem has confirmed it is investigating complaints from small energy companies that significant energy discount deals being offered by their larger rivals could be in breach of competition laws.

The investigation comes amid reports of a price war between energy suppliers and the possibility of energy prices falling by as much as 10% due to a fall in wholesale energy prices. Firms have been warned by industry experts to remain vigilant aboutbusiness electricity prices and gas tariffs as energy prices remain volatile.

British Gas is reported to be considering cutting gas prices by up to 10% over the next few months, following on the heels of at least two smaller energy suppliers.

Any lowering of wholesale prices by energy suppliers could be reflected in lowercommercial electricity prices and gas tariffs. However, industry bodies including the Energy Advice Line have warned firms to be cautious as any price fluctuations would not be felt immediately by businesses on fixed-term contracts.

First Utility is among the smaller energy companies that have complained to Ofgem about the pricing strategies of the major suppliers who advertise significant online discounts.

‘The only way they can make these astonishing offers is by making a loss. This is predatory pricing and we are too small to compete. It’s a way of driving us out of business,’ according to Darren Braham, First Utility’s chief financial officer.

A spokesman for Ofgem said: ‘We have not yet found breaches of competition rules, but we are considering very carefully whether some of the energy companies are abiding by the strict rules governing the timing of short-term online deals.’

Julian Morgan, managing director of the Energy Advice Line, the UK’s leading price comparison and switching service for business energy, said the pricing tactics of the major commercial energy suppliers were a further reason why firms should use a fully independent price comparison and switching service.

“Deals that may appear on the service to offer great value for money may not actually deliver lower business electricity prices or reduced gas tariffs in the long run, “Mr Morgan said.

“Using a reputable, independent business electricity price comparison service like ours enables any organization to get expert advice, free of charge, about the cheapest business energy deals out there.

“Deals that sound good are not always what they seem.”

The Energy Advice Line is a consumer champion and business electricity price comparison service tailored exclusively to businesses.

The service is impartial and not linked to a single supplier. Businesses are offered a selection of quotes from a panel of business electricity and gas suppliers, as well as comprehensive advice on bills, contracts and switching.

For further information about the Energy Advice Line, and to receive a free quote, visit www.energyadviceline.org.uk