Ofgem steps up probe into energy prices

Forensic accounting specialists from BDO have been tasked to look at the figures of British Gas, EDF, Eon, Npower, Scottish Power and Scottish & Southern Energy.

It will examine profits, the price they pay for power on the wholesale markets and how they buy that power (many firms buy energy well in advance).

The move is part of an investigation launched by Ofgem in March, when it stated it had evidence the big six had pushed up prices in response to rising costs more quickly than they reduced them when costs fell .

The regulator says it wants an independent accountant's view to improve transparency over pricing decisions made by the power companies and give consumers more clarity over how retail prices relate to wholesale energy costs.

BDO's appointment comes just days after another round of huge price hikes started to kick in for customers, blamed largely on a steep rise in the price of wholesale gas.

Scottish Power lifted its bills on 1 August, meaning that a typical dual fuel customer paying by direct debit saw prices rise by £173 a year to £1,206.

British Gas raised its gas and electricity prices by an average of 18% and 16% respectively from last week.

Scottish & Southern Energy, Eon and Npower will follow over the coming weeks.

BDO's investigation is expected to last four months, with a report expected before the end of the year.

Ofgem will consider any recommendations made by BDO before it publishes it own.