COVID-19 and energy regulation: a steady recovery

Jonathan Brearley

Jonathan Brearley

Ofgem CEO
16th June 2020
Areas covered:
Corporate
Enforcement
Houses

At the start of the COVID-19 pandemic, the energy industry faced huge challenges. This included protecting customers, especially those in vulnerable circumstances, financial distress or self-isolating and ensuring security of supply, while having significantly fewer staff, and maintaining the safety of customers and staff when work had to be carried out. Again, I want to thank all those working in the sector for their vital work in meeting these challenges over the last few months.

Ofgem worked quickly – and cooperatively with industry – to amend our regulations and reprioritise our work programme, in order to allow the industry to focus its resources on the issues that matter most to customers. In April, we set out what was high priority and must be delivered, and what was lower priority and could be deprioritised if necessary. We said then that this framework would remain until 30 June 2020.

Since then, we have been closely monitoring the industry’s performance. What we’ve heard is that customer service levels and network capacity are returning to normal levels.

Now it is time to move to the next phase of managing the COVID-19 crisis - in particular, for the industry to return to providing the usual level of customer service to all consumers. Today, I have set out Ofgem’s updated approach to regulating performance from 1 July in letters to suppliers, networks and the Electricity System Operator.

We expect industry to work hard to fulfil its regulatory obligations to customers and to maintain a secure, efficient energy system. We do recognise some of the ongoing practical challenges, such as where face-to-face interaction with customers is required, and we will continue to take a pragmatic approach to compliance with obligations in these cases.

From 1 July, normal regulatory rules will apply and the only exceptions can be where companies cannot deliver a particular works or service to the required standards because of the need for them, their supply chain or their customers to comply with government COVID-19 guidance.

We will continue to closely monitor the impact of COVID-19 on the industry’s ability to meet its regulatory obligations. Should we face a second wave of the pandemic, we will, of course, look again at what measures we need to take so that customers continue to be protected.

When we put in place these measures, so that everyone could focus on keeping their customers and staff safe, we also postponed some of Ofgem’s forward work programme. Developing our regulations through policy consultations is central to our role to protect consumers. In the coming weeks we will set out how we intend to return to these important areas of policy development, but we will be mindful of continued extra pressures on the industry. We will be ambitious, but realistic.

The industry has demonstrated its commitment to collaborating with Ofgem and the government to protect consumers through a pandemic. Now it is time to work hard to restore normal standards of service. But it is also an opportunity for the industry to build on its performance during the pandemic to further reset its relationship with consumers. More trust between industry and consumers is vital if we are going to deliver a clean and resilient recovery, which will allow us to hit Britain’s net zero targets. I am sure most companies share this aim, but Ofgem will act robustly if any firm fails to treat consumers fairly in the tough times ahead for many households.