(Updates with DECC comment in fifth paragraph.)
Aug. 6 (Bloomberg) -- The U.K. plans to make rigging of energy markets a criminal offense, imposing penalties of up to two years in prison for price manipulation, according to proposals by Energy and Climate Change Secretary Ed Davey.
Fixing wholesale gas and electricity prices or using insider information to buy or sell energy products would become a crime under the proposed laws, the Department of Energy and Climate Change said in an e-mailed statement. The changes may take effect in spring 2015 pending approval by lawmakers.
The Competition and Markets Authority said last month it would investigate whether the U.K.’s six biggest utilities used their power to increase prices. While energy regulators can now investigate market manipulation and levy fines for rule breaches, the new laws would make violations a criminal offense.
“Manipulating the energy market is absolutely unacceptable,” Davey said in the statement. “These proposals provide a much stronger deterrent, more in line with the approach taken in the financial markets.”
The plans are part of the implementation of European Union regulations related to gas and power, the DECC said in an e-mail response to questions today. Under the EU’s wholesale energy market integrity and transparency rule, known as Remit, companies must publish information that may have an effect on energy prices, including plant outages and flow data.
“It would also be an offense 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,” the DECC said in the statement.
The U.K. competition body said it would examine whether low levels of trading of wholesale power create inefficiencies and barriers to entry. Tim Yeo, a member of Parliament and chairman of the Energy Committee, urged the authority to investigate the wholesale gas market as part of the probe, according to a July 30 letter to the CMA.
The country’s six top energy suppliers are Centrica Plc, SSE Plc, Iberdrola SA’s Scottish Power, RWE AG’s nPower, Electricite de France SA and EON SE.
--With assistance from Mathew Carr in London.