British Gas owner Centrica has vigorously denied claims it had a hand in the manipulation of wholesale gas prices.
Investigations are underway by the Financial Services Authority (FSA) and Ofgem following claims by a whistleblower.
They centre on the claim of that on 28th September - when information was being gathered to determine wholesale gas prices - traders made unrealistic bids to bolster their own positions.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In this case, the bids were designed to push down the wholesale price and therefore would not have impacted retail prices.
The claim has echoes of the Libor-rigging scandal that engulfed the financial sector.
All of the UK's big six energy suppliers have now released statements denying involvement.
The whistleblower was Seth Freedman, who worked at ICIS Heren, a company that publishes energy price reports.
"They [the power companies] are telling you: Look, in order to make our profits and cover our costs and so on, we have to give a price to retail customers which reflects the cost to us," he told the BBC.
"But if you can't trust the market at a wholesale level, it becomes a crisis of confidence.
"People at retail level are just thinking, 'I don't trust these companies' - and it needs to be scrutinised," he added.
Centrica said it had "very robust governance and compliance policies, which regulate its market participation and behaviour" and were reviewed on a regular basis.
"Centrica's traders are prohibited from providing price information to price reporting agencies," its statement said.
"It's important to stress that the wholesale gas market has more than 50 participants, not just energy supply companies, handling hundreds of trades every day."
The FSA confirmed that it had "received information in relation to the physical gas market and will be analysing the information".
Ofgem also said it had "received information", adding it would "consider carefully any evidence of market abuse that is brought to our attention as well as scope for action under all our other powers".
MM
-
Four AI ETFs to buyIs now a good time to buy AI ETFs? We examine four AI ETFs that investors might want to add to their portfolio
-
Chase boosts easy-access interest rate - savers could earn 4.75%Chase is offering a boosted interest rate which is fixed for six months, on top of the standard variable rate
