Energy MPs call on UK Govt. to put consumers at heart of proposed new OFGEM powers

Family consumer SSEGovernment proposals to increase OFGEM’s powers over energy supply and transmission could help to drive innovation in the energy sector and potentially reduce costs for consumers.

However, the proposals should be amended to ensure decisions the regulator makes are transparent and open to appeal, the cross-party Energy and Climate Change Committee has recommended.

 MPs on the House of Commons committee have been scrutinising the Government’s draft legislation on energy, published earlier this year.

The draft Bill gives OFGEM new powers to change industry codes – these govern the way the industry participates in energy markets – in order to help consumers switch supplier more quickly and ensure suppliers match the amount of energy they buy against the amount customers actually consume.

It also enables the regulator to run competitive tenders for the design and construction of onshore transmission assets – the overhead lines, underground cables and substations that transfer electricity from energy generators to distributors.

angus macneil mpMP Angus MacNeil (SNP, Western Isles, pictured left), Chairman of the Energy and Climate Change Select Committee, explained:

“The Government’s draft legislation is a step in the right direction. The energy industry has for too long been able to decide when to change the way it engages with the energy market. This has not served consumers well.

“Giving OFGEM the power to initiate these code changes should put the needs of customers front and centre. The engagement OFGEM says it will undertake with industry about such changes should keep appeals to a minimum and enable alterations to be made as quickly as possible – to the benefit of bill payers.

“The proposals to introduce competitive tendering for onshore transmission are also a positive move in principle. This will ensure once more that bill payers remain the focus of the Government’s proposals.”

 The MPs also recommend that:

  • Before introducing the Bill in Parliament the Government should consult further with Scottish stakeholders to ensure that there is a level playing field for transmission projects across Great Britain.
  • Ministers amend the proposals so that competition for onshore distribution is subject to its own impact assessment before being introduced
  • Government ensures its proposals are “future proof” so that suppliers are able to match the amount of energy they buy to the amount consumers use based on shorter periods than half-hourly settlement.

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed