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: 22nd Aug 2006
  • Press releases
  • 1 Associated documents
Statement by the Gas and Electricity Markets Authority, following an investigation into compliance by GUC with its distribution licence

  • Published: 10th Jan 2006
  • Press releases
  • 1 Associated documents
Statement by the Gas and Electricity Markets Authority, following an investigation into compliance by SP Manweb with obligations in its distribution licence relating to the calculation and reporting of units distributed and losses

  • Published: 31st Aug 2005
  • Decisions
  • 1 Associated documents
Notice under Section 25 of the Electricity Act 1989 following an investigation into compliance by Atlantic Electric and Gas Limited (“Atlantic”) with the Renewables Obligation and the Renewables Obligation Scotland under

  • Published: 14th Jun 2005
  • Decisions
  • 1 Associated documents
Decision by the Gas and Electricity Markets Authority - Compliance with Section 33BA of the Gas Act 1986 - Section 33BA of the Gas Act 1986

  • Published: 10th Jun 2005
  • Guidance
  • 1 Associated documents
See guidance on Impact Assessments June 2005.

  • Published: 10th Jun 2005
  • Other
  • 1 Associated documents
See the Review of Regulatory Impact Assessments - June 2005.

  • Published: 1st Jun 2005
  • Press releases
  • 1 Associated documents
Statement by the Gas and Electricity Markets Authority, following an investigation into Southern Electric Gas Ltd’s and SSE Energy Supply Ltd’s compliance with standard licence condition 48 of their gas and electricity supply licences.

  • Published: 7th Apr 2005
  • Decisions
  • 1 Associated documents
Decision concerning Ofgem's investigation into BGT's recruitment practices for meter reading agents

  • Published: 16th Feb 2005
  • Press releases
  • 1 Associated documents
Statement by GEMA following investigation into compliance by Eastern Power Networks & London Power Networks with regulatory obligations.

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