Ofgem to be streamlined to focus on consumer protection
An overhaul of Ofgem will see the energy regulator reformed to provide stronger protections to consumers. Reforms to its remit – the first since it was created in 2000 – will enable it to ensure that energy consumers are treated fairly, says the government.
The revamp will give Ofgem:
- Stronger powers to enforce consumer law directly, meaning it will no longer need to go through a lengthy courts process to make sure customers get what they are owed if companies treat them unfairly;
- The means to ensure energy bosses act on behalf of consumers, with powers for Ofgem to ban their bonuses if they break the rules; and
- Reforms to its remit to focus on economic and consumer protection, including the ability to regulate in new areas of the market.
Since Ofgem was established, the market has grown more complex, with a wider range of products and services, some of which are not fully regulated, including heating oil.
To deliver the shift, Ofgem’s remit will be streamlined to focus on its core functions as an economic and consumer protection regulator. This involves removing Ofgem’s responsibility for oversight of home upgrade schemes in a role that is set to be performed within government by the Warm Homes Agency.
The changes follow the government’s proposals to protect energy consumers with fairer, quicker and easier access to compensation when they are let down, as well as Ofgem’s plans to make sure suppliers’ Guaranteed Standards of Performance reflect the evolving energy system.
