Chaired by MP Peter Luff, the creation of the body has come after four of the UK's major energy suppliers have increased the costs of their domestic gas and electricity tariffs since the start of 2008.
Mr Luff said that competitiveness is an issue that "demands to be addressed".
He explained: "It is a complex but vital question and one that affects everyone in the country - individual consumers and households, small businesses and major energy users alike."
The UK's energy watchdog, energywatch, has announced that it is in support of the investigation.
Adam Scorer, the organisation's campaigns director, said that the inquiry could provide some "clear thinking" about how the market is working for both business and household energy customers.
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