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Lobby group hits out at ‘unreasonable and unprofessional’ behaviour by Ofgem

Britain’s main energy lobby group has accused the regulator of “unreasonable and unprofessional” behaviour, including contacting energy company staff at 6pm on Fridays, exposing a rift at a crucial time for the industry. 

In a letter seen by the Financial Times, Energy UK complained to Ofgem about its “approach to compliance that discourages innovation”, “critical external tone” and “intimidating” language towards junior energy company employees. 

Dhara Vyas, Energy UK chief executive, said the trade body had “heard increasingly worrying concerns from suppliers about Ofgem’s working practices”, including “asking suppliers to adhere to unreasonable timescales”.

Criticising “unreasonable and unprofessional working practices”, she cited “sending formal communications outside of working hours, for example at 6pm on a Friday evening”.

Some of the issues were raised in the context of the regulator’s review of the industry’s use of pre-payment meters. Vyas said this was an “example of a process that is indicative of fundamental and systemic issues that erode trust in the regulator and in the market more broadly”. 

Ofgem began its review after media reports into how British Gas used court warrants to forcibly install pre-payment meters in vulnerable customers’ homes as bills surged during the energy crisis.

Centrica, which owns British Gas and is a member of Energy UK, later apologised and has suspended forced installations of pre-payment meters, which require users to pay for gas and electricity in advance.

Ofgem has in the past been accused of having too close a relationship with the sector, but Vyas told chief executive Jonathan Brearley that a “reset” was needed in their relationship.

Sent in December, the letter points to a breakdown in relations between the regulator and the industry, which could complicate the massive overhaul required to meet decarbonisation targets.  

It comes as UK Prime Minister Sir Keir Starmer and chancellor Rachel Reeves are also urging watchdogs to do more to support the government’s “mission” of economic growth. 

In a meeting in January, Reeves urged regulator bosses to “institute cultural change” in a push to deliver growth, rather than “excessively focusing on risk”, according to a readout of the meeting published by the government at the time.

Ministers are separately conducting a review into Ofgem, having said it wants to boost the watchdog’s role as a “consumer champion”. The regulator was criticised after dozens of suppliers collapsed during the surge in wholesale gas prices in 2021 and 2022. 

In its response to that review, published on Friday, Energy UK said Ofgem was “ill-suited to perform its roles, in particular, to facilitate economic growth” owing to “conflicting duties and poorly delineated responsibilities”.

The lobby group says its members collectively supply energy to more than 95 per cent of UK homes, and account for nearly 80 per cent of the UK’s power generation. Other members include Scottish Power, Octopus and Utilita. 

Ofgem said in a statement that it had a “good working relationship” with Energy UK and discussed a range of issues with the trade body “constructively”.

“We make no apology for driving improvements for customers,” the regulator added. “There is more to do for our suppliers to offer a truly exceptional service that consumers deserve and we will continue to press forward on this.”

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