The competition regulator is preparing to drop its earlier judgment that Britain’s largest energy providers overcharge customers by £1.7bn a year.
After two years compiling it, the Competition and Markets Authority is due to publish its report into the energy market on 24 June.
It is expected to omit the claim that the big six providers charged customers £1.7bn too much a year between 2009 and 2013, the Financial Times reported(partial paywall). The CMA had said the overcharging was particularly damaging for vulnerable groups without the means or will to shop around.
The claim, made in an interim report last July, will be replaced by a statement that households and small and medium-sized businesses could have saved that amount if they had switched provider, the FT said.
The energy companies, including British Gas and SSE, were furious about the £1.7bn figure, which they called misleading, and have lobbied hard for the CMA to change its stance. They have said the energy market is highly competitive and that their profits are in line with the risks they take.
The regulator has already been criticised for watering down its initial proposals. It has called for a price cap on tariffs covering 4 million households on prepaid meters but it has not widened the cap to cover customers stuck on expensive standard variable tariffs.
The CMA inquiry was established to clear up whether SSE, Iberdrola’s Scottish Power, British Gas-owner Centrica, RWE npower, E.ON and EDF Energy were abusing their dominance of the market. But the regulator has retreated from more radical proposals including the extreme option of breaking up the big operators.
The watchdog opened its inquiry in 2014 in response to growing unrest about energy costs and the opposition Labour party’s pledge to freeze bills and restructure the industry if it won last year’s general election.
The big energy companies were prepared to challenge the CMA in court over the £1.7bn claim but the change of wording will remove that threat, the FT reported.
A CMA spokesman was not immediately available to comment.
