The retail energy market is undergoing far-reaching and exciting changes. Our regulation needs to stay ahead of market developments and in a way that does not distort them. It must enable diverse approaches so we can foster more competition and innovation and support new market participants, while offering effective protection to all consumers.
To this end, we’ve committed over time to rely more on general principles rather than detailed prescriptive rules about how companies should run their businesses.
Why a principles-based approach to regulation?
Simply put, we consider it can deliver better outcomes for consumers. It puts greater responsibility on suppliers to understand and deliver what is right and fair for their customers and enables comprehensive consumer protection. It will also future-proof our regulation and provide room for innovation. We still see a continued role for prescriptive rules where appropriate.
We are now exploring how best to implement a principles-based approach.
For now, we are focused on the domestic gas and electricity supply markets, where the scope for change is particularly significant and there is a high volume of prescriptive rules.
Below you can view all our publications and outputs relating to our proposed approach, including how we are engaging with stakeholders to inform our work in this area.
We are continuing to engage actively with stakeholders and are always happy to hold bilateral discussions over the phone or in person. If you have any questions or further views relating to this work, please get in touch at FutureRetailRegulation@ofgem.gov.uk.