UK Energy Watchdog Opens Probe into Abuse of Dominant Position

The Office of Gas and Electricity Markets (Ofgem), the UK’s energy market regulator, has opened an investigation into an unnamed company for alleged abuse of dominant position.

“The opening of this investigation does not imply we have made any findings about whether there has been an infringement of competition law,” said Ofgem, which is investigating via its Gas and Electricity Markets Authority (GEMA).

“GEMA has launched an investigation under Chapter II of the Competition Act 1998 into suspected breaches of competition law. The investigation concerns a suspected abuse of a dominant position,” Ofgem said.

The probe is in its early stage of initial evidence gathering, the UK energy regulator said.

Ofgem has been frequently investigating energy companies for anti-competitive practices and for failing to comply with the UK’s legislation for consumer protection.

At the end of last year, a company owned by UK-based supermajor Shell was fined by the energy regulator, weeks after the communications regulator also fined part of the customer-facing part of the group. Hudson Energy Supply (HES), a non-domestic market energy supplier which Shell had bought in 2019, was fined with $2 million (£1.6 million) after Ofgem found it “failed its customers by failing to comply with a number of important licence conditions.” Shell insisted the actions leading to the penalties took place before it bought HES.

At the end of 2023, Ofgem – following a detailed investigation – decided to impose a financial penalty on EP SHB Limited (EPSHB), requiring it to pay $30.3 million (£23.63 million) for breaching its generation license in a way that unfairly raised consumers’ bills.  

“Ofgem’s investigation found that between October 2019 and May 2021, EPSHB breached the Transmission Constraint Licence Condition (TCLC) by submitting excessive bid prices at its South Humber Bank gas-fired power station (SHBA) during periods when the ESO needed it to lower its output,” the regulator said.

By Charles Kennedy for Oilprice.com

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