Ofgem questions whether Energy UK is up to the task ahead

A senior figure at Ofgem has questioned whether the trade body Energy UK is “sufficiently resourced and empowered” to meet the needs of the industry in the changing regulatory landscape.

Senior partner for consumers and competition Rachel Fletcher made the comments while discussing Ofgem’s shift away from a prescriptive, rule-based regime towards one based on general principles.

Speaking at the Utility Week Congress in Birmingham this week, she said: “Generally the level of supplier support we have for principles-based regulation is encouraging. We had a senior roundtable meeting a few weeks ago, which was well attended and showed many companies are thinking actively about this.”

However, Fletcher said she still has fears: “Industry wide issues will continue to crop up whether due to human error, data inaccuracies or technology going wrong. If Ofgem is to give industry collectively more space to sort these out suppliers will require a strong trade body and one questions whether Energy UK is sufficiently resourced and empowered to do this job, and also how can non-member companies be brought into the fold.”

Energy UK said in a statement: “Energy UK, working with our members, has a strong track record in taking responsibility for issues affecting our customers and driving up standards to ensure the safe, affordable and clean supply of gas and power. We have a growing membership of over 90 members, including 22 suppliers. Energy UK looks forward to continuing to work with Ofgem as regulatory framework evolves to make greater use of principle-based regulation.”

Fletcher also raised concerns that suppliers are “still mainly focused on managing the risk of enforcement,” rather thinking of how to “use the opportunity to put their customers’ at the heart of their business”. “If this thinking prevails it will severely limit how far we can get in using principles instead of rules,” she added.

Furthermore, she worried that a “wholesale culture change” necessary for the shift to achieve the desired outcomes has not materialised: “I am not convinced that this is happening consistently across the industry or as quickly as needed given the poor legitimacy the industry has in the court of public opinion… Three years into a principles based world, we should be well into this change process and there should be more evidence of it bearing fruit.”