Accountants To Help With Energy Pricing Probe

Wed, 31 Aug 2011

Forensic accountants have been hired by Ofgem, the UK’s energy regulator, as part of its investigation into pricing by the "big six" energy firms.

Accountancy firm BDO has been called upon to analyse trading profits, wholesale prices and how the six suppliers - British Gas, E.On, EDF, Scottish Power, npower and Scottish &Southern - hedge against price fluctuations, to see if they have understated their retail profits to justify higher prices.

In appointing BDO, Ofgem said it hopes to gain a view from an independent accountant on how to improve transparency over pricing decisions made by the power companies and give consumers more clarity over how retail prices relate to wholesale energy costs.

A statement from the regulator said: "Ofgem has appointed accountancy firm BDO to provide recommendations on how best to improve accounting disclosures by energy suppliers ."

"This follows Ofgem's review of the retail market earlier this year, which identified the need to improve accounting transparency to give consumers more clarity about how retail prices relate to suppliers other costs."

Welcoming the move, consumer watchdog Which? said: "The 'big six' energy companies have failed to prove that price increases are fair, so we support Ofgem's efforts to scrutinise price hikes across the board. Only then will we know if customers are really getting a fair deal."

BDO will report to Ofgem around the end of the year. Ofgem will then consider the report and publish high level findings and any recommendations for further action.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.