Energy bosses will now face up to two years in jail if convicted of manipulating energy prices for their own gain, Lib Dem energy secretary Ed Davey has signalled.
Under the new laws, UK energy regulators will get new powers to prosecute people suspected of abusing the energy market, with the threat of criminal sanctions now similar to those that bankers risk if found guilty of market manipulation.
Davey said in a statement: “Manipulating the energy market is absolutely unacceptable, and these proposals provide a much stronger deterrent – more in line with the approach taken in the financial markets.
“The government is doing everything it can to help consumers by increasing market competition to drive prices down. We have also set up the first ever annual competition assessment, which has led to the first ever referral of the sector to the competition authorities.”
The laws, which could come into force from next spring, will make it a criminal offence to fix the price of energy at an artificial level or use insider information to buy or sell energy on the wholesale market, as well as an office to make misleading claims or conceal facts about wholesale energy prices to manipulate the market – especially if it could affect competition in the energy market.
Rachel Fletcher, senior partner at the energy regulator Ofgem, said: “Ofgem has a track record for taking strong action against companies that break the rules. And we want the strongest possible deterrents in place to guard against market manipulation and insider trading. We put forward the case to government for greater powers to take action if needed, and we welcome this consultation.”