Great Britain's Energy Regulator to Limit "Excessive Profits" on Backup Power

­Britain is taking steps to limit what it deems excessive energy profits.

Back in June, Britain's finance minister Jeremy Hunt met with an assortment of regulators to “to guarantee markets are working properly” for consumers beset by high household bills (including increased mortgage costs).

After Minister Hunt met with the heads of the telecoms, energy, water and financial services regulators, the Financial Conduct Authority (FCA) Chief Executive Nikhil Rathi vowed to take "swift action if firms aren’t doing all they should to help people dealing with tighter household budgets".

On a similar note, Britain’s energy regulator, the Office of Gas and Electricity Markets (Ofgem) put forth a possible licensing condition to limit “excessive profits” on back-up power systems.

Under existing rules and norms, and according to Reuters, the National Grid System Operator (ESO) often pays what some would deem an “inflated fee” to produce electricity for extra, backup power to keep the grid stable.

Allegedly, some electricity generators are artificially limiting supplies ahead of the evening peak demand in order to charge a higher price later on.

This apparently leads to charges of up to 6,000 pounds ($7,586) per megawatt hour (MWh), which spurred Ofgem into action.

“The proposed new licence condition will ensure electricity generators don’t take advantage of existing rules to make excessive profits in the balancing mechanism," Eleanor Warburton, acting director for Energy Systems Management and Security at Ofgem, said.

Ofgem will make its final determination by the end of the year.