Centrica Hopes for No 'Political Interference' During Big Six Energy Price Hike Probe
Centrica Hopes for No 'Political Interference' During Big Six Energy Price Hike ProbeReuters

Centrica declared that it welcomes the anti-trust investigation into Britain's Big Six energy but said it hopes for a review that is "free of political interference".

Centrica said in a statement that is committed to an open, transparent and competitive British energy market and welcomes an objective review, by an independent and respected regulatory authority.

"We strongly support a comprehensive independent review that is free of political interference, with as swift a resolution as possible," it said.

"Anything that clears the air and helps rebuild trust in the industry must be a good thing. Britain's energy market is highly competitive and we believe that a full independent review by a respected regulatory authority would demonstrate precisely that," said Sam Laidlaw, chief executive officer of Centrica.

"Competition is working, providing choice for consumers and some of the lowest prices in Europe

"We hope that a lengthy review process will not damage confidence in the market, when over £100bn (€120m, $166m) of investment in new infrastructure is needed. A prolonged period of uncertainty could damage investment at a time when Britain's energy security is being seriously challenged.

"For our customers, we offer competitive tariffs and were the first to cut prices this year. Our focus remains on providing affordable energy, excellent service and innovative products that help customers reduce their consumption and save money on their energy bills."

Market Discrepancy?

Three of Britain's regulators revealed on 27 March that the UK's Big Six energy providers could be broken up into smaller groups after they referred SSE, Scottish Power, Centrica, npower, E.on and EDF for an anti-trust investigation.

In a statement, one of the three watchdogs, Ofgem said the move will finalise whether the energy giants are hiking up gas and electricity prices disproportionately to what the wholesale market charges them.

Centrica said that while it welcomes the review, "competition in the energy market is intense and Centrica and British Gas reject any suggestion of possible tacit coordination with other market participants."

Retail energy prices are among the lowest in Europe and Centrica claims that British Gas retail margins in 2013 were just 4.5% after tax.

Profits at British Gas Residential have been broadly flat for the last 5 years, rising by just 2% between 2009 and 2012 and then falling by 6% in 2013.

Centrica has recently completed a 2-year £500m cost reduction programme, of which £300m related to British Gas.

It added that the number of energy retail suppliers is growing, with 19 competitors and increasing levels of switching and competition in the wholesale gas and electricity markets is also very strong.