Ofgem calls on biggest UK utilities auction output

The UK energy regulator, Ofgem yesterday called on the biggest utitlities in the country, to auction up to a fifth of their electricity generation output, and simplify tariffs that confuse the customers with their complexity.

The call comes as the regulator increases efforts to temper the influence of the biggest utilities.

An Ofgem review has found that competition in the gas and electricity market was being stifled by "a combination of tariff complexity, poor supplier behaviour and lack of transparency".

According to Lord Mogg, the regulator's chairman, the proposals "should force open the electricity and gas markets to ensure the market works effectively for consumers".

He added that the energy supply companies had eight weeks in which to engage constructively with Ofgem's proposals. He warned if firms frustrated reforms they risked ending up a the Competition Commission.

According to Ofgem the clearest example of the continued influence of the big utilities was evidence that the Big Six had adjusted prices in response for rising costs more quickly than they reduced them when costs fell.