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Ofgem is the Office of Gas and Electricity Markets.
Our priority is protecting and making a positive difference for all energy consumers through promotion of value for money, security of supply and sustainability, for present and future generations. We do this through the supervision and development of markets, regulation and the delivery of government schemes.
We work effectively with, but independent of, government, the energy industry and other stakeholders within a legal framework determined by the UK government and the European Union.
How are we governed?
Ofgem is governed by an Authority, consisting of non-executive and executive members and a non-executive chair. Non-executive members bring experience and expertise from a range of areas including industry, social policy, environmental work, finance and Europe.
The Authority determines strategy, sets policy priorities and takes decisions on a range of matters, including price controls and enforcement. The Authority's powers are provided for under the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998 and the Enterprise Act 2002. Further information is available in the Authority section of the website.
Ofgem endeavours to keep its operations transparent. Examples of practices that demonstrate this include:
- publishing the minutes of its Authority meetings;
- an annual open meeting of the Authority; and
- full and thorough consultation in developing decisions (including the development of its corporate strategy).
How are we funded?
We recover our costs from the licensed companies we regulate. Licensees are obliged to pay an annual licence fee which is set to cover our costs. Ofgem is independent of the companies we regulate.
We operate under a five-year cost control regime that runs 2010-2015. It pegs our expenditure growth at 3 percentage points below the retail price index. This is expected to result in savings of £12.5 million.