Energy UK has urged the regulator to focus on creating a framework which supports how the sector might evolve in the future rather than particular business models. In addition, the “principles of good economic regulation” should be “central” to any new framework proposed.
A spokesperson for Energy UK said: “Rather than focusing on particular types of business models, we suggest a better way of framing the discussion would be to consider how customer propositions and service offerings are evolving, will continue to evolve and what implications this has for regulatory framework and wider energy system, both now and in the future.”
“We note Ofgem has made statements of transitioning towards a more principles based approach to regulation and would welcome further engagement with Ofgem on what this would like and how it is best implemented. Central to this should, we feel, be the principles of good economic regulation,” the spokesperson said.
NTBMs potentially face a number of regulatory challenges due to the structure of the energy market, such as vertical integration and the lack of customer engagement, which are already being addressed by the ongoing Competition and Market Authority’s investigation, Ofgem said.
For further discussion on the problems posed to regulation by NTMBs, read our analysis, Disrupters: A challenge to the whole regulatory framework.