Watchdog unveils new rules on Big Six energy prices

Energy giants face financial penalties if they do not trade fairly with independent suppliers

The energy watchdog has unveiled new rules in a bid to drive down prices by increasing competition and forcing the Big Six suppliers to disclose more information on profits.

Ofgem said the measures would leave the accounts of British Gas, SSE and the other main providers more transparent and make it easier for smaller independent suppliers to enter the market.

The rules, which come into force on 31 March, will address charges that the Big Six are profiteering by disguising the margins of their retail units.

They will force them to give a more detailed account of how they trade electricity between their generator businesses and household supply arms.

The rules will also hit the companies with financial penalties if they do not trade energy they generate fairly with independent suppliers, which do not produce their own electricity.

The firms will also be required to publish wholesale power prices two years in advance, making it easier for small companies to budget better.

The moves follow criticism from MPs that Ofgem failed customers by not doing enough to ensure the finances of the Big Six were transparent.

But Shadow energy minister Caroline Flint said: “Instead of simply stopping energy companies doing secret trades between the generation and retail parts of their business, Ofgem is tinkering around the edges with a whole host of complicated interventions which will be difficult to properly monitor and enforce.”