OFGEM ANNOUNCES MEASURES TO SPEED UP ENERGY INDUSTRY REFORMS

31.03.2010

Proposals will cut red tape, speed up the reform process and allow consumer representatives to participate more actively Ofgem publishes today (Wednesday) final proposals resulting from the Code Governance Review to introduce a wide range of changes to the industry codes (the set of rules that underpin the gas and electricity industry in GB) that will: make the existing arrangements more transparent and accessible, increasing the scope for smaller players and consumer groups to participate; speed up and simplify code reform processes so that large scale and complex changes can be made more quickly; and reduce the regulator’s role in code modifications that have little or no customer impact, allowing the industry more self-governance in line with better regulation principles.

Ofgem’s Senior Partner for Transmission and Licensing, Stuart Cook, said: “Ofgem’s Code Governance Review has confirmed the need to modernise the UK’s energy industry codes to help speed up the essential reforms necessary to effectively maintain security of supply and smooth the transition to a low carbon energy sector”.

The two-year Code Governance Review subjected the existing industry codes arrangements to a thorough overhaul involving extensive consultation. Ofgem has now concluded that there are a number of deficiencies in the existing framework that: have caused significant delays to essential reform, with consequential detriment to customers; and threaten the ability to deliver the reforms necessary to meet the security of supply and environmental challenges facing the industry.

Reforms include proposals to: give network users and other materially affected parties the right to raise proposals to modify network companies’ charging methodologies; and clarify the requirement to assess the environmental impacts when considering proposals in accordance with Ofgem’s guidance.