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The Office of Gas and Electricity Markets (Ofgem), working for the Gas and Electricity Markets Authority (GEMA), is the government regulator for the electricity and downstream natural gas markets in Great Britain. It was formed by the merger of the Office of Electricity Regulation (OFFER) and Office of Gas Supply (Ofgas). Its primary duty is to “promote choice and value for all gas and electricity customers".

Its main powers derive from the Gas Act 1986, the Electricity Act 1989, the Competition Act 1998, the Utilities Act 2000, the Enterprise Act 2002 and the Energy Act 2004.

Contents

Structure

[1]

Sir John Francis Mogg has held the position of Chairman since his appointment in October 2003. Sir John became a Life Peer [2] on 18th April 2008 and on the 28th May 2008 he was created Baron Mogg of Queens Park in The County Of Sussex.

Sir Alistair Buchanan was appointed Chief Executive on 1st October 2003.[3]

Gas networks regulation

OFGEMs principle objective is to protect the interests of consumers although it does not deal directly with them.

The primary mechanism by which OFGEM regulates the gas distribution networks is via the GDPCR (Gas distribution price control review). The GDPCR is a periodic review carried out by OFGEM in which is sets and specifies the maximum revenue which a network can recover from its customers for a specific time period.

Prior to 1st June 2005 National Grid was the primary gas distribution network operator in the UK and they operated eight regional gas distribution networks (GDN). On 1st June 2005 National Grid sold four of its GDNs to Scotia Gas Networks, Northern Gas Networks and Wales & West Utilities.

OFGEM have stated that it intends to use the information which it can now collect from these independently owned and managed companies to regulate the sector more effectively.[4]

The GMB Union has expressed concern that successive GDPCRs have led to cuts which pose a threat to the security of gas supply, public safety and also that there has been insufficient provision for future recruitment and training within the industry[5][6][7]

The potential for conflict[8] has been further escalated when, on 16th October 2009, OFGEM published a consultation document entitled Price control pension principles-3rd consultation

Fuel Mix Disclosure guidelines

On December 16, 2005 OFGEM published the "Fuel Mix Disclosure by Electricity Suppliers in Great Britain Guidelines December 2005". Although the new licence condition had been introduced on the 18th March 2005 the actual guidelines for implementation of the fuel mix disclosure requirement were available for the first time.

Record price increases and lack of gas market supervision by Ofgem

On 30 July 2008, Centrica announced the largest single price increase for an energy utility in modern British history: 35% on the price of gas. The increase was widely condemned and cited as evidence of lack of true competition in both the British and European gas markets; also of a lack of rigour of Ofgem, the UK competition authority. [9]

In early October 2009 the BBC's Watchdog consumer interests television programme featured a report relating to the ever increasing price of gas as a domestic fuel in the UK and questioned why fuel prices have not fallen in line with the wholesale price of gas. The report was entitled "Why haven't energy prices come down?"[10] In the television programme, Watchdog tried to obtain answers to this question from both energy suppliers and OFGEM but none would provide a spokesperson or a statement.

See also

References

External links

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