Factbox - Main findings of UK watchdog's energy supplier probe

(Reuters) - Britain's competition watchdog is proposing a cap on energy prices after it found the country's largest energy suppliers overcharged households around 1.2 billion pounds each year ($1.9 billion) between 2009-2013. Suppliers were acting within the law but consumers were charged too much money, the Competition and Markets Authority (CMA) said in provisional findings of a sector-wide competition probe. Some of the provisional findings and solutions are listed below: OVERCHARGING Average prices charged by the country's largest energy suppliers were around 5 percent above competitive levels from 2009 to 2013 for domestic customers and 14 percent above the competitive level for small and medium-sized businesses, the CMA said. This means domestic customers paid around 1.2 billion pounds more on an annual basis than if competition had worked more effectively, while businesses paid around 0.5 billion pounds more. SWITCHING The report said most electricity and gas customers in Britain could have saved an average 160 pounds a year by switching suppliers, tariffs and payment methods over the period between the first quarter of 2012 and the second quarter of 2014. To address obstacles to switching, the CMA said it was considering numerous measures, including the roll-out of smart meters and possible penalties for firms which do not switch customers by a certain deadline. PROFITS Domestic gas and electricity prices have increased significantly over the last 10 years. Average domestic electricity prices rose by around 75 percent in real terms between 2004 and 2014, and average domestic gas prices rose by around 125 percent in real terms over the same period. The main drivers of domestic price increases from 2009 to 2013 were environmental obligations and network costs. "Our provisional view is that the profitability analysis does not provide evidence that overall, the six large energy firms earned excessive profits from their generation business over the period or that wholesale market prices were above competitive levels," the CMA said. In general, there is a lack of understanding about the factors which lead to price increases so energy companies' financial reporting systems should be made more transparent. TRANSITIONAL PRICE CAP The CMA said it is necessary to consider measures to prevent energy suppliers from rolling customers on to higher-priced tariffs. One measure to prevent this could be a transitional safeguard price cap and the CMA is seeking views on at what level the cap might be set and its duration. Sources: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/442500/EMI_PFs_Summary.pdf https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/442489/EMI_Remedies_Notice_-_Final.pdf (Reporting by Nina Chestney; Editing by Keith Weir)