New proposals put forward by Energy and Climate Change Secretary Ed Davey could lead to anyone found guilty of rigging energy prices facing a jail term of up to two years, it has been announced.
If the new laws are introduced it could mean that energy regulators will be given new powers to prosecute if it is suspected that someone has rigged gas and electricity prices. Moreover, if the laws were brought into force it would mean that if anyone was to make misleading claims about wholesale energy prices in a bid to manipulate the market, they could be charged with an offence.
Commenting on the proposed new laws, Ed Davey said:
“Manipulating the energy market is absolutely unacceptable, and these proposals provide a much stronger deterrent – more in line with the approach taken in the financial markets.
“The government is doing everything it can to help consumers by increasing market competition to drive prices down. We have also set up the first ever annual competition assessment, which has led to the first ever referral of the sector to the competition authorities.”
Current regulations mean that energy regulators have the power to investigate anyone that is suspected of breaching the rules and they can impose fines. However, a change in the law would mean much harsher punishments and could lead to a prison term of up to two years.
The government has announced the proposals as part of its attempts to reform the energy market so that consumers’ rights are put first. The announcement is part of the government’s attempts to loosen the stranglehold that the big six energy companies have on the energy market. The government also hopes that its actions will lead to greater competition in the energy sector
It has also been announced that there is to be an investigation into competition and transparency in the retail energy market. The investigation is considered necessary to restore the confidence that has been lost in the power industry in recent years.
Commenting on the new proposals, Rachel Fletcher, senior partner, markets, Ofgem, said:
“Ofgem has a track record for taking strong action against companies that break the rules. And we want the strongest possible deterrents in place to guard against market manipulation and insider trading. We put forward the case to government for greater powers to take action if needed, and we welcome this consultation.”