It follows price changes announces by the "big six" energy suppliers – British Gas, EDF Energy, E.ON, npower, Scottish & Southern, and ScottishPower – over the past couple of months.
The watchdog says that net profit across the industry has increased from an average of £65 per retail customer in September, to £90 in its latest report. An Ofgem statement said that, while it expects firms to make a profit, it wants to investigate that suppliers are operating "as effectively as possible".
Alistair Buchanan, Ofgem chief executive, said: "With Britain facing an investment bill of £200 billion over the next 10 years, consumers have the right to expect that the energy retail market is providing them with value for money.
"The energy retail market can only be fully effective if consumers have confidence that the market is transparent and easy to take part in."
The news comes as consumers face the coldest November weather in 17 years, with weather forecasters claiming the cold snap set to last a further 10 days.
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