If you have been watching the news about the energy industry, wanting to know about how regulatory and market changes will affect how much you pay for your gas and electricity tariffs, you may have seen Ofgem.
But what exactly is Ofgem, what is its function and what is its role in the UK energy market?
Ofgem stands for The Office of Gas and Electricity Markets. This is a non-ministerial government department in charge of regulating and overseeing companies operating the British gas and electricity network. There are more than 60 such regulatory bodies in the UK, which oversee everything from markets (Competition and Market Authorities) to food (Food Standards Agency) to charities (Charity Commission).
In the energy industry, Ofgem imposes price controls and regulations to achieve its main goal of protecting the “interests of existing and future consumers of gas and electricity,” both domestic and industrial.
Ofgem achieves this by:
promoting value for money
promoting supply security and sustainability
supervising and developing markets and competition
implementing regulations and providing government schemes
As part of its commitment to future energy customers, it assists the energy industry in making environmental improvements, stick to the initiatives put forward by the current government and meet the various environmental and carbon goals.
Ofgem works together independently from the government and the energy industry and other stakeholders, as the National Regulatory Authority, under the EU framework.
What does Ofgem mean to you?
Energy customers will likely have little direct contact with regulators, but Ofgem is behind the scenes watching and influencing almost every part of the energy market. This includes everything from prices, assistance schemes, customer service to what appears on your bill.
Recently, Ofgem has taken action to ensure that the energy market stays as fair and clear as possible for consumers, making it easy for them to see information about tariffs and suppliers and compare them to find the best energy deal, from suppliers with the best customer service. Whilst thinking about your gas and electricity, why not check the condition of your electricity and Gas Meter box? For replacements, visit meterbox.co.uk
Ofgem also protects the interests of consumers in the following ways:
Although Ofgem itself does not personally deal with customer complaints about energy suppliers (this must first be directed towards the supplier in question or, if not, the Ombudsman), they keep records of the amount and subject of complaints logged about suppliers as part of market monitoring activities.
Manage price limits:
Ofgem sets levels and regulates energy price limits, as regulated by the government. Currently Ofgem manages two price limits: one on standard and standard variable rates, applied in 2019, and the other on pre-payment tariffs, which originate in 2017. Their aim is to provide clear information that helps to empower customers to look for comparisons in energy prices and find better deals.