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Within the book we examine pricing. The topic of pricing is analysed to show that pricing is not merely an accounting subject because it is governed through law and regulation in many industries. The gas and electricity industry is highly regulated, within the UK, and the powers of the regulators have been strengthened through The Energy Act 2013.

 

OFGEM (Office for Gas and Electricity Markets) is an independent regulator and part of their duties is to protect consumers, analysing pricing within both the gas and electricity market to ensure it is fairly approached. It is important to note that within the UK generation, distribution and supply of electricity are three separate business activities that require separate licenses, therefore OFGEM pay particular attention to the supply side of the industry, the side that deals directly with the consumer.

It was reported by Chazan (2014) in the Financial Times that the big six energy suppliers are under particular scrutiny at the moment, by the regulators. The big six have witnessed an increase in public attention within the general press because of the increases in electricity prices, increasing energy poverty. As mentioned earlier the regulators now have increased power to investigate pricing. One of the new parts of legislation allows the regulators to take stronger action if there are any misleading claims of facts about wholesale energy prices because this can have a direct impact on competition, which leads to increases in pricing to the consumer.

 

Chazan, G. (2014) Energy suppliers face prosecution over price fixing. Financial Times 5th August 2015.