Background to the industry codes
Section 5(1) of the Gas Act 1986 (as amended) and section 4(1) of the Electricity Act 1989 (as amended) set out that companies involved in the generation, distribution, transmission, supply, transportation, shipping or provision through interconnectors of electricity or gas require licences, unless specifically excluded from doing so by the Secretary of State.
Ofgem decides the content of these licences. The licenses require the establishment of a number of multilateral industry codes that underpin the gas and electricity markets.
These codes establish detailed rules for industry that govern market operation, the terms for connection and access to energy networks.
Licensees will need to be signed up as parties to codes in order to operate in the gas and electricity markets. To find out more about specific codes and who to contact to talk about becoming a code party, please read our Electricity Codes and Gas Codes pages.
Modifying the codes
The codes are ‘live’ documents, meaning that they can be changed. Modification proposals may be made by code signatories (generally network operators and those who use that network, although the categories of signatory do differ from code to code) or by consumer representatives.
Each code has a panel or committee that oversees the assessment of proposed changes to that code. A general rule is that a change should only be made if it better meets that particular code’s relevant objectives than the current arrangement.
For some kinds of proposed changes, that body will also make the final decision on whether implementation is appropriate, but this is not always the case.
Some complete codes (such as the Balancing and Settlement Code or Uniform Network Code), or sub-sections of codes (such as Part 1 of the Distribution Connection and Use of System Agreement) may only be altered with the consent of, or at the direction of, Ofgem. For examples of code modification decisions, please see our pages for each of the different codes.
Our commitment to timely decision making
Our Corporate Strategy and Plan commits us to issue decisions on at least 70 per cent of proposed changes within five weeks of their reaching us for decision.
Indicative timetables for upcoming decisions can be found at the bottom of this page.
Right of appeal on decisions
The Energy Act 2004 introduced a right for market participants to appeal our decisions on proposed industry code changes to the Competition Commission, subject to that decision being eligible for this right.
The eligibility criteria are determined by the Secretary of State, who has the right to designate which kinds of decisions may be appealed. This designation may be subject to periodic review and change.
The current designations by the Secretary of State are set out in the The Electricity and Gas Appeals (Designation and Exclusion) Order 2005 - PDF, 50Kb - link opens in a new browser window and The Electricity and Gas Appeals (Designation and Exclusion) Order 2009 - PDF, 47Kb - link opens in a new browser window. Under these Orders, the following codes are eligible for appeal:
• Balancing and Settlement Code (BSC);
• Connection and Use of System Code (CUSC);
• Network Code;
• Supply Point Administration Agreement (SPAA);
• Master Registration Agreement (MRA);
• Uniform Network Code (UNC);
• Distribution Connection and Use of System Agreement (DCUSA); and,
• Independent Gas Transporters Uniform Network Code (iGT UNC).
There are two specific exclusions from the right of appeal for the designated codes shown above. These exclusions are where we:
• are in agreement with the majority recommendation of the code's own governing panel; or
• consider that the delay caused by holding an appeal against that decision is likely to have a material adverse effect on the availability of electricity or gas for meeting the reasonable demands of consumers in Great Britain.
The Competition Commission has provided guidance on its procedures for considering code appeals.
Using these pages
The 'Industry codes work' section of our website is used to track current and recent initiatives that cut-across several industry codes, rather than specific decisions on a proposal affecting a single code.
For details of current projects, please refer to the tabs on the left-hand side of this page.
For details of individual modification decisions, please click through to the electricity or gas code decision sections using the links in the 'Further resources' box on the right-hand side of this page.