Exempting smaller suppliers from the Universal Service Obligation
- Publication type:
- Consultation
- Publication date:
- Closing date:
- 5 November 2026
- Status:
- Open
- Topic:
- Electricity supply,
- Innovation
We are seeking views on the licence wording to exempt electricity suppliers with fewer than 50,000 domestic customers from the Universal Service Obligation (USO).
Consultation description
We previously consulted on a proposal to exempt electricity suppliers with fewer than 50,000 domestic customers from the USO. Under the proposed change, these suppliers would not be required to offer supply to all domestic consumers until they reach the threshold, at which point the USO would apply.
The proposal is intended to reduce barriers to entry and support innovation in the electricity retail market.
Having considered the responses, we continue to believe this is a proportionate, targeted measure that could reduce barriers to entry and support innovation while limiting risks to consumers. We are now consulting on the specific wording of the proposed change to the electricity supply licence.
Following feedback to our earlier consultation, we have adjusted the proposed licence wording so that the 50,000-customer threshold takes account of customers supplied by licensees within the same corporate group.
Who should respond
- energy suppliers
- other interested industry parties
- consumer groups
- charities
How to respond
Submit your response by 5 November 2026 by emailing marketsstrategy&delivery@ofgem.gov.uk.