Ofgem's powers

Decisions about enforcement action are taken by the Gas and Electricity Markets Authority (our governing body).

However, authority is delegated to the members of Ofgem’s Executive that allows them to open cases and to discontinue cases where there is no case to answer.

In addition, the Authority will normally delegate its decision making powers to one of our Managing Directors in relation to cases where it is likely that a low penalty will be appropriate, or that no penalty will be imposed. Such cases may be referred back to the Authority for a decision on policy grounds.

Where enforcement cases are contested, the Authority may delegate decisions to the Enforcement Decision Panel (EDP). These decisions can involve imposing a significant financial penalty on energy companies when they break regulatory rules. Members of the EDP are also involved in Settlement Committees, together with a member of Ofgem’s Executive. Settlement Committees are convened where the energy company being investigated is prepared to accept breach of a regulatory rule or rules and where both the company and Ofgem agree that the case is best concluded by way of an agreed settlement. Such settlements contain a penal element and usually result in consumer redress payments being made to individuals affected and or to a suitable charity.  Any such redress payments made to a charity or trust are allocated by an independent third party.  The processes for settlement and contested cases are set out in some detail in the Enforcement Guidelines.

The Authority's powers are provided for under the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998, the Enterprise Act 2002, the Business Protection from Misleading Marketing Regulations 2008 and the Unfair Terms in Consumer Contracts Regulations 1999.

Enforcing licence conditions

Any company wanting to supply gas or electricity, run a gas or electricity network or generate electricity must either be exempt from the requirement to hold a licence for these activities or be licensed by us, under our powers in the Gas and Electricity Acts.

We monitor companies to ensure they abide by their licence conditions. If they are found in breach of these conditions the Enforcement Committee of the Authority  can

  • issue an enforcement order to ensure companies comply with their licence conditions
  • impose financial penalties of up to 10 per cent of the licensee’s turnover.

Enforcing competition law

Effective competition helps keep downward pressure on costs, to the benefit of customers. Competition also helps promote more diversity in gas and electricity supplies and a greater choice of tariffs and services for customers.

Our priority is to help markets operate transparently and effectively, remove barriers which may prevent this and, when necessary, use our powers to tackle anti-competitive behaviour or practices.

If a company or business entity is found to have infringed UK or EU competition law, the Enforcement Committee of the Authority can:

  • accept binding commitments or issue directions to stop the behaviour
  • impose financial penalties of up to 10 per cent of the company’s world-wide turnover.

Enforcing consumer protection law

We monitor companies to ensure that they comply with European and UK consumer protection law. Where a breach has occurred, we can apply to court for an enforcement order requiring a trader to comply. We can also accept undertakings from the trader that the trader will not continue or repeat the conduct.

Market investigation references

We carry out market reviews of activities connected with the generation, transmission and supply of electricity and the transportation and supply of gas.

We may also make a market investigation reference to the Competition and Markets Authority where we have reasonable grounds for suspecting that any feature or combination of features prevents, restricts or distorts competition in the gas and electricity markets.


The investigations main page contains open and closed investigations (including decisions) dating from 2009. Decisions taken on investigations prior to this date are listed in our page Our approach to regulation.

Lessons Learned

To help suppliers learn from past issues that have resulted in enforcement and compliance action, we are sharing Lessons Learned.  Our first publication relates to Lessons Learned on Sales and Marketing.

Publications and updates

  • Published: 19th Feb 2018
  • Reports and plans
  • 1 Associated documents
Ofgem has published a report on lessons learned from enforcement and compliance activity in relation to software implementation projects.

  • Published: 10th Oct 2017
  • Guidance
  • 1 Associated documents
We have revised our Enforcement Guidelines. The Enforcement Guidelines describe how we will use our enforcement powers when businesses breach their obligations.

  • Published: 24th Aug 2017
  • Guidance
  • 1 Associated documents
We have appointed the Energy Saving Trust (EST) as the independent Service Provider to manage and allocate voluntary redress funds.

  • Published: 8th Mar 2017
  • Reports and plans
  • 1 Associated documents
Ofgem has published a report on lessons learned from enforcement and compliance activity in relation to sales and marketing.

  • Published: 14th Apr 2016
  • Guidance
  • 1 Associated documents
This guidance explains how Ofgem will exercise its powers to approve and enforce voluntary redress schemes for infringements of competition law.

  • Published: 14th Dec 2015
  • Guidance
  • 1 Associated documents
An open letter setting out the process and principles involved in allocating voluntary redress payments in the context of enforcement investigations.

  • Published: 6th Aug 2014
  • Open letters and correspondence
  • 1 Associated documents
On 22 July 2014, the Department of Energy and Climate Change (DECC) published a Frequent Asked Questions (FAQs) which, among other things, address this.

  • Published: 27th Mar 2014
  • Investigations, Open letters and correspondence
  • 1 Associated documents
This open letter sets out the Authority's position on future financial penalties.