Energy companies will be forced to wait a further six months for the findings of the Competition and Markets Authority (CMA) probe after the regulator said it needs to refine its analysis of the energy market.
The CMA said on Monday that it will delay the deadline for the investigation from 25 December to June 2016 to give itself time to take into account the industry’s responses, but it expects to deliver its final remedies to the energy market by April.
Currently UK suppliers face the possibility of partial price regulation under the CMA’s proposed fixes, after the authority accused suppliers of taking advantage of disengaged customers. But these assumptions have been consistently called into question, and may now have prompted the inquiry group to reconsider its analysis.
“We now need to refine our analysis in the light of the many responses we have received, to design potential measures that are effective and proportionate to remedy each possible issue, and then to consult widely on those potential measures.
“This is a huge programme of work and we have concluded that we could not complete it by the original statutory deadline,” the CMA said.
The CMA’s early findings revealed concerns about customer engagement, the role that regulation has played in shaping the market, and the level of profit made by the incumbent energy suppliers. But the big six have consistently raised questions over the calculations used by the CMA.
Centrica said in its latest submission to the CMA investigation that it has “serious concerns” about the validity of the assumptions which drive its provisional findings, branding them “inconsistent with commercial reality” and claiming that they would fail to stand up to rigorous peer review.
“We do not believe that the analysis of profitability and margins in the [provisional findings] is sufficiently robust to support a conclusion that excessive profits are being earned in retail markets,” Centrica said.
The CMA said it wants to make sure that it has time to take into account the many detailed responses received from suppliers, consumer groups, government and regulators to its findings and admitted that this will lead to a change in its analysis.
“[T]his is a once in a generation opportunity to shape the future of this market for the better. It’s important that we get it right,” said the CMA’s chairman of the energy investigation Roger Witcomb.