Friday, 7 June 2013

Ofgem gets new powers to tackle energy market manipulators

Energy companies found guilty of trying to manipulate markets will face unlimited fines under tough powers being given to the industry regulator.

Ed Davey, the energy and climate change secretary, will introduce the Regulation of Wholesale Energy Markets and Transparency (REMIT) legislation to parliament just weeks after a dawn raid on major oil companies.

The government will stress that the energy regulator, Ofgem, will be given sweeping powers to inspect premises, seize data and levy much higher financial penalties under REMIT.

The European Commission is also keen to introduce a system whereby companies will be forced to report details about their buying and selling of oil, gas and power when it is done over-the-counter.

There is increasing concern following the Libor scandal that rocked the banking world that the relatively unregulated energy markets are open to similar abuse by financial institutions and energy companies, which regularly use them for speculation as well as for meeting actual need.

Those fears were heightened when a whistleblower working for one of the price reporting agencies, ICIS-Heren, claimed to have seen attempts by unscrupulous traders to submit false data to the price reporting agency. That triggered a probe by Ofgem and what was then called the Financial Services Authority, now the Financial Conduct Authority.

The concerns were compounded last month when the competition authorities inside the EC launched raids on oil companies BP, Statoil, Shell and another price reporting agency, Platts.

via Ofgem gets new powers to tackle energy market manipulators | Business |

Ofgem gets new powers to tackle energy market manipulators

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