22 February 2008 | Paul Snell
Ofgem is to investigate the gas and electricity supply markets used by small businesses to examine their effect on energy bills.
Although the energy regulator said it had "no clear evidence the market was failing", it has launched the probe into the markets following concerns about how they are affecting customers.
The announcement came on the same day that Centrica, parent company of British Gas, announced operating profits of £1.9 billion. British Gas Residential made a profit of £571 million, and British Gas Business made £120 million.
"The decision to conduct the probe is in response to mounting public concern about whether the market is working effectively," said Alastair Buchanan, Ofgem chief executive. "We are concerned about the increased volatility of wholesale prices and we want to investigate how European and other global energy market developments are affecting energy bills in Britain."
"We shall replace our magnifying glass with a microscope and take a more detailed look at the retail market and the influence of global wholesale market developments," he added.
Initial findings of the probe will be published by the end of September.