LONDON: Britain's regulation of electricity and gas supply has shaped competition in the retail energy sector, and several issues will need to be investigated further, the Competition Markets Authority (CMA) said on Wednesday.
"The supply of electricity and gas is heavily regulated, and the form that regulation takes has a profound effect on the shape of competition in retail energy markets," the CMA said in an update on its continuing investigation into competition in the UK energy retail market.
"We have identified several elements of the regulatory regime that may have a potential impact on competition between suppliers to serve customers, and which we intend to investigate further," it added.
In its so-called updated issues statement on Wednesday, the CMA highlighted issues that are likely to become the focus of its probe, and whether there is an adverse effect on competition in the supply or acquisition of electricity and gas.
Prime Minister David Cameron first ordered a review of competition in the energy retail sector in October 2013, calling the high cost of energy unacceptable.
Public trust in the country's "big six" providers - EDF , SSE, Centrica, E.ON, RWE and Scottish Power, which control around 95 percent of the energy market - had slumped after years of rising energy bills.
Last year, Britain's energy market regulator Ofgem referred the country's retail energy market to the CMA for an investigation. The final conclusions of the probe are not expected until November or December this year.
On Wednesday, the CMA said that between 2009 and 2013 average domestic electricity prices increased by 24 percent and average domestic gas prices by 27 percent.
Average profit margins earned on sales to domestic customers were 3.3 percent over that period - with average gas sale margins at 4.4 percent and electricity sale margins at 2.1 percent.
"We are continuing to look at whether overall levels of profitability in energy retail have exceeded an appropriate benchmark," the CMA said.
By comparing all available domestic tariffs, the CMA also found that from the first quarter of 2012 to the second quarter of 2014, over 95 percent of duel fuel customers of the "big six" energy firms could have saved an average 158 to 234 pounds a year by switching supplier and/or tariff.
Commenting on the statement, SSE said it would "maintain its approach of working with the CMA".
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