- Government takes first step to repair Great Britain’s retail energy market and deliver real change for working people in line with its Plan for Change.
- Review will strengthen the energy regulator to support consumers and protect households from poor service, and make sure it continues to support growth and innovation in the energy sector.
- It will also investigate improving access to automatic compensation when things go wrong.
Energy consumers will benefit from stronger protections and improved customer service through the first comprehensive review of the energy regulator, which launches today.
Households have paid the price for the country’s broken energy market, with sky-high bills, suppliers collapsing, and poor customer service during a cost-of-living crisis.
The review will establish Ofgem as a strong consumer champion, driving up standards for household and business consumers both now, and as energy use evolves with smarter and greener technology.
The significant rise in energy costs in 2022, and the supplier failures that resulted from it, damaged confidence and exposed that the regulator is no longer fully equipped to protect consumers in today’s market.
Bad practice by some suppliers has eroded trust, including the forced installation of pre-payment meters and taking too long to refund excess credit or correct bill errors. The review will ensure Ofgem is equipped to address these unacceptable outcomes for consumers, including the ability to order companies that are guilty of wrongdoing to refund or compensate customers directly.
There will be a strong focus on delivering improvements to what matters to working people, from paying bills and resolving complaints to upgrading their homes and cutting energy costs with a new boiler, heat pump or solar panels.
The review will also consider how Ofgem can better drive the government’s missions for clean power and economic growth by supporting the private sector to invest in the energy infrastructure we need and ensuring that families who want to upgrade their homes with clean technology can do so safe in the knowledge that they are protected by robust and responsive regulation.
Minister for Energy Consumers, Miatta Fahnbulleh said
We have listened to people’s concerns and learned from the energy crisis. We will ensure that working people have access to the best possible support to choose more affordable, smarter, clean energy that is right for them.
Energy bills are still too high, and that is why we worked with suppliers to announce £500 million of additional winter support. The review of Ofgem will set it up for the transition to net zero and establish it as a champion for households and businesses by fixing the broken energy market and putting consumers first.
Jonathan Brearley, CEO of Ofgem, said
Ofgem welcomes this review. A great deal has changed since our remit was set 25 years ago, and will continue to change as we move to new ways of generating and using energy. The energy crisis served as an important reminder to all that protecting consumers must remain the focus no matter what challenges we face, so that every household receives the service and support they rightly expect.
We have already made significant reforms to stabilise the market, drive investment in our infrastructure, and begin to improve standards, however we know more can be done with more powers. We’re committed to keeping consumers at the heart of everything we do, and working together with government, industry, and consumer groups and charities to shape a future energy and retail market that delivers for everyone.
Planned reforms will build on the Prime Minister’s challenge at the International Investment Summit, where he set out his ambition to ensure the UK’s regulatory regime is fit for the modern age, creating the right conditions for growth, investment, and innovation.
Proposed new measures to enhance Ofgem’s consumer protection powers will include shortening the eight-week response time for complaints and strengthening the energy ombudsman.
The review will also examine Ofgem’s role in approving new infrastructure projects and improving the connections process, ensuring that the regulator plays a key role in fostering growth and delivering the government’s clean energy mission.
The government will also investigate strengthening and expanding automatic compensation. When things do go wrong with suppliers, consumers will have quicker and easier access to redress. Reforms will simplify the framework for compensation, which currently varies across issues and areas of the energy market and make it easier for people to get the compensation they are entitled to.
Notes to editors
- The call for evidence marks the first step of the review and will conclude at the end of February.
- It will invite views from energy users, consumer groups and industry on areas including
- Remit – where Ofgem should regulate and what its focus should be.
- Standards – what additional powers Ofgem might need to set stronger standards for suppliers and improve customer service outcomes.
- Tools – equipping the regulator with more effective compliance and enforcement tools, allowing it to step in sooner to protect consumers if they experience any issues and delivering automatic compensation if they breach standards.
- Ofgem is Great Britain’s (England, Scotland and Wales) independent energy regulator, responsible for
- Working with government, industry and consumer groups to deliver a net-zero economy, at the lowest cost to consumers.
- Stamping out sharp and bad practice, ensuring fair treatment for all consumers, especially the vulnerable.
- Enabling competition and innovation, which drives down prices and results in new products and services for consumers.
- Ofgem operates in a statutory framework set by Parliament, which establishes its duties and powers.
- The government is responsible for setting the policy for the energy sector and proposing any changes to this statutory framework.
