Ofgem under fire for response time to allegations of energy price-fixing When whistleblower Seth Freedman saw what he thought was possible manipulation of the wholesale gas markets he brought it to the attention of colleagues at ICIS Heren, a price reporting agency. A senior manager reported the incident to the energy watchdog Ofgem. In this conversation she explained that Ofgem did not believe it currently had powers to investigate the suspected manipulation. Source: Guardian Link to this video The energy regulator, Ofgem, has come under fire over the speed of its response to the gas market scandal and not pressing a year ago for the introduction of legislation that would have allowed it to tackle market abuse more robustly. European competition authorities have now started gathering evidence on alleged price-rigging in the gas sector. They are trying to establish whether there has been collusion between the large energy firms that would warrant the first EU investigation of the energy sector on the grounds of cartel-like conduct. Investigations into alleged price rigging are already under way by the UK's City watchdog, the Financial Services Authority, and Ofgem itself. It emerged on Wednesday night that Ofgem may have been told about the problem by the price reporting agency ICIS Heren as long as a month ago. But the watchdog failed to speak to whistleblower Seth Freedman - a price reporter at Heren whose disclosures to the Guardian triggered the investigations - and said there was little it could do about the issue anyway. Caroline Flint MP, the shadow energy secretary, said she had written to Ofgem demanding to know exactly when it was notified of allegations by ICIS Heren some time before they came to light. Too often, Ofgem has ducked the opportunity to get tough with the energy giants, failed to enforce its own rules and let energy companies get away with ripping off hard-pressed families and pensioners. These latest allegations suggest that Ofgem has serious questions to answer about whether it knew about reports of dodgy trading before they came to light this week and, if so, why it failed to act. Ofgem has declined to say when ICIS Heren first brought its concerns to the regulator but the Guardian has been told by well-placed sources that it may have been mid-October. Arlene McCarthy, the vice chair of the European parliament's committee on economic and monetary affairs, has also asked Ofgem to confirm the date to her. In a letter to Alistair Buchanan, chief executive of Ofgem, she also asked why emergency meassures were not implemented and "why was an investigation not immediately launched." Freedman was told by his boss Louise Boddy at ICIS Heren that she had not made much progress. She said in a conversation taped by Freedman: "So I've called Ofgem about that day's trading and given them a brief explanation of what happened. They've got no powers basically. They're going to have them under REMIT [the European Union Regulation on wholesale energy market integrity and transparency], but at the moment they have none... What she [Ofgem official] said is, 'Look, we've got no powers. There's really not much we can do right now, but we are interested.' Wider questions have also been asked about why Ofgem had not introduced powers that it should adopt under REMIT. In a second letter to Ofgem chairman, Lord Mogg, McCarthy asks: "As Chairman of the European Regulators Group for Electricity and Gas (ERGEG) and as President of the Council of European Energy Regulators (CEER) you are aware that Ofgem is in the process of implementing the EU regulation on wholesale energy market integrity and transparency (REMIT). In December 2011, market manipulation of energy prices became an offence across the EU. Why then did Ofgem not promptly implement the provisions regards powers and sanctions? Ofgem said on Wednesday night that it was working on the introduction of REMIT and expected to do so by June next year but said: "We have to wait for DECC [the department of energy and climate change]." Ofgem said it still had "broad market monitoring powers" and could request information in specific circumstances, for example under the Gas Act, the Electricity Act, Enterprise Act or the Competition Act. We will review the available evidence to consider the best way forward (over the gas manipulation claims) including whether to take forward any enforcement action under existing enforcement powers. Senior officials working for Joaquin Almunia, the European commissioner for competition, met Freedman on Wednesday to discuss the allegations. "There was a short, informal meeting [with Freedman]," confirmed Antoine Colombani, a spokesman for Almunia. We asked questions about how the markets worked. Following almost two hours of questioning by senior officials at the European commission, Freedman said their inquiries centred on trying to substantiate allegations of collusion between rival companies, the key criterion for launching an anti-trust investigation. Freedman has handed over a USB stick of computer data on the alleged dodgy trading operations to British investigators. The EC is to send someone to his home in London to obtain a duplicate of the data.