UK clears energy firms’ accounting over price rises

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A forensic review of UK energy company accounting practices has found no evidence of financial irregularities aimed at justifying steep rises in retail gas and electricity bills last year, regulator Ofgem, which commissioned the study, said.

A string of double-digit price increases, announced in the summer of 2011 by utilities, helped drive UK inflation to a three-year high in September at a time of stagnant wage growth and economic hardship, prompting a consumer backlash.

The energy watchdog launched the study partly to answer allegations that utilities had used accounting techniques to justify raising retail energy bills, by making those operations appear less profitable.

Britain’s six largest utilities, E.ON, RWE, Centrica, SSE, Scottish Power and EDF have not shifted profits between business segments to make retail operations look less successful, Ofgem said on Tuesday.
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