The UK is poised to become one of the first countries in the European Union to bring in tough new rules to stop the abuse of the gas and electricity market.
Industry regulator Ofgem will be handed new powers to access information, inspect premises, and impose unlimited fines on firms that break the law.
The changes, due to be brought into effect by the coalition government at Westminster on June 29, are required under the terms of an EU regulation, called REMIT.
It follows allegations last year that major power companies had manipulated gas prices, in a similar way to the Libor bank rate-rigging scandal.
“It is vital that we have all weapons at our disposal in the fight against unlawful activity in the energy market,” said Ed Davey, the UK Energy Secretar.
“It is my role to protect consumers, particularly the most vulnerable, who can suffer the most when markets are abused. That’s why I have given Ofgem new powers to deal with market manipulation and insider dealing in wholesale gas and electricity.”
Andrew Wright, Ofgem’s senior partner for markets, said: “It is important that consumers have confidence that energy markets are transparent and free from manipulation.
“The Department of Energy and Climate Change is giving Ofgem the necessary enforcement powers, under REMIT, to tackle abuse in the wholesale gas and electricity market.
“These powers complement the work we are doing to improve liquidity and transparency in energy markets, and our broader reforms to improve consumer trust and confidence.”
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