The UK government is introducing an energy independence bill that will grant Ofgem expanded regulatory authority over the energy sector, particularly targeting mis-selling practices. The legislation will empower the regulator to impose financial penalties, issue compensation orders, and remove operators found to have engaged in rulebreaking behavior. A significant focus of the measure concerns energy brokers and price comparison services, which have traditionally operated with minimal oversight compared to intermediaries in other financial sectors.
Energy brokers have been identified as a source of consumer detriment, with the government stating that these intermediaries have directed businesses into contracts priced above market rates while collecting undisclosed commissions. The regulatory expansion is projected to generate annual savings exceeding £100m for businesses through the elimination of hidden fees and corrective measures against misrepresentation. Additionally, Ofgem will receive authority to restrict executive compensation packages when leadership has neglected customer interests, addressing public concerns regarding substantial bonus distributions during periods of regulatory scrutiny involving vulnerable customer treatment.
The bill encompasses additional provisions addressing housing standards and energy production. Local authorities will receive enhanced enforcement mechanisms to pursue landlords failing to satisfy energy efficiency requirements, with potential penalties reaching £30,000. Properties with energy performance certificate ratings below E have been prohibited from rental since 2020, with limited exemptions available. The legislation will also establish a moratorium on onshore fracking in England, effectively ending new licensing for the practice. Fracking was previously prohibited by a prior government administration in 2019, then reinstated during 2022 before again becoming subject to restriction. The government characterizes this approach as protective of community safety, citing concerns regarding seismic activity and potential groundwater contamination, though the moratorium will permit certain lower-volume operations and alternative extraction techniques.
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