Our approach to regulation

Mae’r dudalen yma ar gael yn Gymraeg.

We regulate only where necessary to protect consumers’ interests. We carefully consider whether any regulatory requirement we are proposing to introduce is proportionate and necessary to protect consumers.

We prioritise all work within a cost control regime that ensures our expenditure growth remains at three percentage points below the retail price index.

We are committed to setting out the costs and benefits, as well as the social and environmental impacts of all major decisions, through Impact Assessments.

As part of our better regulation work we develop an annual Simplification Plan to help reduce the burden of administration while ensuring consumer protection.

Cost control

In 2010, we made our second five-year commitment to an RPI-3 cost-control regime. This means we have to achieve real-terms savings of three per cent a year. The year to March 2012 was the second year of that commitment. So far, our savings add up to £4.9 million

The RPI-3 cost-control regime allows us to increase or decrease the overall budget cap to reflect major new pieces of work (or major reductions in our workload). If we need to change our budget, we need approval from our Audit Committee.

In 2011-12, the cost-control regime saw our budget cap reduced. Between 2012-13, we saw an increase in the RPI cap because of the costs involved in two major new pieces of work: implementing our Retail Market Review and administering the government’s new Energy Company Obligation scheme.

Compliance

Responsibility for ensuring compliance with relevant legislation, licences and codes is the responsibility of the companies that we regulate. We are helping suppliers to learn from and better manage the risks that have historically resulted in enforcement or compliance action through lessons learned engagement activities.

We may also use compliance tools to deliver corrective action, where a compliance breach has already occurred. We have set out our approach and expectations in an Open letter on regulatory compliance.

While compliance activity plays an important part in our role as regulator, there will also be circumstances where enforcement action is the most appropriate course of action, to deliver corrective action and to deter future non-compliance.

Enforcement

Our role includes ensuring that energy companies comply with the law. To ensure that this happens, we have the power to conduct investigations and carry out sanctions through enforcements. Find out more in our Investigations section and also on our Enforcement Overview pages (2014/15, 2015/16 and 2016/17).

In late 2014 we completed a major review of our approach to enforcement. For more on what this covered and to access all publications produced during the review, including our final conclusions and outputs, see Enforcement review.

Impact assessments

We have a duty to undertake impact assessments for every important policy proposal we make. We have developed a rigorous approach to these in line with best practice, while ensuring that our decisions are consistent with our wider statutory duties.

While impact assessments do not determine the final policy decisions we make, they are a vital part of the policy-making process and provide a valuable framework for assessing the impact of important policy proposals.

Simplification plan

We are committed to the principles of better regulation and continually seek to improve our efficiency and effectiveness. We publish an updated simplification plan on an annual basis. To find out more, see Corporate policy, planning and reporting.

Publications and updates

  • Published: 27th Mar 2015
  • Charts and data, Reports and plans
  • 1 Associated documents
An overview of our enforcement activity and figures for the period April 2014 to March 2015.

  • Published: 6th Nov 2014
  • Decisions
  • 1 Associated documents
This letter sets out the Authority’s position on the key points made by stakeholders. It also outlines the main changes to the policy statement that the Authority has decided to make as a result of the consultation.

  • Published: 6th Nov 2014
  • Consultations and responses
  • 20 Associated documents
We have considered the responses to our March consultation and have now published our revised statement of policy on financial penalties and consumer redress under the Gas Act and Electricity Act.

  • Published: 6th Nov 2014
  • Guidance, Investigations
  • 1 Associated documents
This statement sets out the factors that the Authority will normally consider before imposing a financial penalty and/or a consumer redress order.

  • Published: 28th Oct 2014
  • Press releases
  • 0 Associated documents
During a review of all suppliers, we raised concerns with Ovo about their compliance with a range of rules. Today we welcome their statement on compliance with our Simpler, Clearer, Fairer market rules.

  • Published: 12th Sep 2014
  • Decisions
  • 1 Associated documents
We have reviewed our approach to enforcement. In this document, we summarise and address the key points made by stakeholders during the consultation.

  • Published: 11th Sep 2014
  • Guidance
  • 1 Associated documents
This document sets out the terms of reference for the Enforcement Decision Panel (EDP). The terms of reference were amended on 15 September 2016 to reflect the EDP’s role in criminal cases.

  • Published: 3rd Sep 2014
  • Agendas, minutes and presentations
  • 1 Associated documents
Memorandum of Understanding between the Competition and Markets Authority and the Gas and Electricity Markets Authority.

  • Published: 3rd Apr 2014
  • Guidance
  • 1 Associated documents
This document gives the cost recovery principles we use when deciding licence fees.

  • Published: 28th Mar 2014
  • Closed: 23rd May 2014
  • Consultations and responses
  • 16 Associated documents
Following our Enforcement Review, we consulted on changes to our Enforcement Guidelines. After considering the responses, we have now published our revised Enforcement Guidelines.

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