OFGEM welcomes the introduction of the new Utilities Bill into Parliament

United Kingdom

The Director General of OFGEM, Callum McCarthy, welcomed the passage of the Utilities Bill through Parliament which began on the 20th January 2000. The Bill aims to modernize its energy markets and stream line and bolster its regulatory regime. One of its principle objectives is for regulators to protect the interests of consumers.

Mr McCarthy said that the Bill and, in particular, this primary duty, backs up a lot of work already in hand at OFGEM and also lays down a framework for future regulation of competition which has so far already achieved lower prices and better services for gas and electricity customers. He also welcomed the creation of the Gas and Electricity Markets Authority which will see the regulator as chairman, and the creation of a new independent consumer body to represent gas and electricity customers.

The legislation has been designed to bring the full benefits of competition to electricity consumers by enabling a new market-based system for electricity trading to be introduced to replace the present electricity pool. This is expected to reduce generation prices and cut industrial and domestic electricity bills.

OFGEM will have additional power to impose monetary penalties on companies for past and present breaches of their licences, although no power to retroactively fine generators for price manipulation under the former wholesale electricity pool. Other powers include freeing up the wholesale electricity market to further competition.

(OFGEM Press Release R/6)