Ofgem reforms empower regulator to ban energy bosses’ bonuses

Energy regulator Ofgem is set for a transformation to bolster consumer protection and accountability, with new powers designed to speed up compensation for households let down by suppliers. Under the reforms, executives could lose bonuses if their actions breach licence conditions in a way that causes substantial consumer harm. For the first time since its 2000 inception, Ofgem would gain the authority to prohibit bonuses and enforce consumer law directly, reducing the need for lengthy court processes to recover money owed to customers. The changes also include moving oversight of home upgrade schemes out of Ofgem and into a government body, the Warm Homes Agency, as part of a broader simplification of responsibilities within the energy sector. The government argues the market has grown more complex, with a wider range of products and an increasing number of customers in areas with limited regulation, including heating oil. Rules are slated to come into force on 15 December. DESNZ officials, including Energy Secretary Ed Miliband, say the reforms are about fighting for consumers and ensuring tougher, fair measures to curb bonuses for rule-breakers, while encouraging executives to act in customers’ best interests.

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