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UK to probe signs of energy price fixing

London - British regulators referred the country's energy supply sector for a full anti-trust investigation on Thursday, kick starting a legal process that could see some of the country's big suppliers broken up.

The three watchdogs said competition among Britain's energy suppliers was weak, partly due to possible coordination of price setting which makes it difficult for new providers to enter the market.

"Ofgem believes a referral offers the opportunity to once and for all clear the air and decide if there are any further barriers which are preventing competition from bearing down as hard as possible on prices," said Dermot Nolan, chief executive of Ofgem, Britain's energy regulator.

The country's big six energy suppliers - SSE, Scottish Power, Centrica, RWE npower, E.ON and EDF Energy - control around 95% of Britain's energy supply market.

The regulators said there were signs that the big six coordinate their pricing strategies because they typically change tariffs at the same time, they raise prices more quickly than they cut them and profits have risen for all.

Their retail profits have risen from £233m in 2009 to £1.1bn in 2012, the regulators said.

"We found a number of aspects of the behaviour of the six largest suppliers that would appear to be consistent with tacit coordination between them," the regulators said in their assessment report.

Prime Minister David Cameron ordered a review of competition in the energy retail sector in October last year, following public outrage over high energy bills.

The issue has become a political football a year before a parliamentary election with all parties trying to tap into the public discontent over high energy bills, which have risen 10% on average over two years.

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