Britain’s top energy lobbying group, Energy UK, has criticized the energy regulator, Ofgem, for its “unreasonable and unprofessional” practices. This complaint comes at a critical time for the energy sector, as tensions between regulators and companies rise. The group’s letter expresses concern over Ofgem’s communication style, particularly highlighting instances where staff were contacted late on Fridays.
Dhara Vyas, the chief executive of Energy UK, indicated that suppliers are increasingly troubled by Ofgem’s methods, which are viewed as stifling innovation and presenting an intimidating atmosphere for employees. Particularly concerning were claims that the regulator enforces unrealistic deadlines and sends formal correspondence outside regular work hours.
These issues come to light amid Ofgem’s ongoing review of the use of pre-payment meters by energy firms. Vyas described this situation as symptomatic of deeper, systemic problems that undermine trust not only in Ofgem but within the wider market. The regulator initiated this review following reports about British Gas’s use of court orders to forcibly install pre-payment meters in homes of vulnerable customers as energy prices surged during the crisis.
Centrica, the parent company of British Gas and a member of Energy UK, issued an apology and halted the use of forced pre-payment meter installations.
While Ofgem has faced criticism in the past for being too cozy with the industry, Vyas has advised its chief executive, Jonathan Brearley, that a “reset” in their relationship is necessary. The letter, sent in December, underscores a significant breach in communication that could hinder the urgent changes needed to meet decarbonization goals.
This uproar coincides with the UK government’s push, led by Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves, for regulatory bodies to enhance their support for economic growth. During a January meeting, Reeves stressed the importance of fostering a cultural shift among regulators, encouraging them to focus on growth rather than being overly cautious.
In a parallel move, the government has launched a review of Ofgem with the aim of enhancing the regulator’s role as a “consumer champion.” Ofgem has been under fire for its performance amid the crisis, especially after numerous energy suppliers went under due to soaring wholesale gas prices in recent years.
In response to the review, Energy UK stated that Ofgem’s structure and duties are incompatible with its goal of promoting economic growth, citing “conflicting duties and poorly defined responsibilities.” Energy UK represents companies that provide energy to over 95% of homes in the UK and contribute to about 80% of the nation’s electricity production. Its members include Scottish Power, Octopus, and Utilita.
Ofgem, however, defended its approach, asserting that it maintains a good working relationship with Energy UK and engages with them constructively on various issues. The regulator emphasized its commitment to enhancing customer service standards among suppliers, stating that more work is needed to achieve the exceptional service consumers deserve.