Citizens Advice response to Ofgem’s Forward Work Programme – 2024/25

Citizens Advice response to Ofgem’s Forward Work Programme – 2024/25 129 KB

Citizens Advice welcomes the opportunity to respond to Ofgem’s Forward Work Programme, and look forward to working closely with the regulator over the coming year, especially in areas which align with our own Consumer Work Plan for 2024/25. 

Overall we support Ofgem’s key strategic priorities: shaping a retail market that works for consumers, enabling infrastructure for net zero, and establishing an efficient, flexible energy system. 

One important new responsibility for Ofgem going forward will be its role as the regulator for heat networks. Citizens Advice look forward to working closely with Ofgem in our new role as the statutory consumer advocate for heat networks. It is vital that consumer interests are at the heart of this new regulatory framework. 

We are supportive of Ofgem’s goal of facilitating investment in net zero infrastructure in a way that delivers a high quality of service to consumers at a reasonable cost. Trust in regulated companies and regulators is at a historic low, and therefore it is crucial that this is not compromised further by setting returns for investment at a level that is not fair. Therefore, Ofgem should review the changes it made to the incentive framework related to the Accelerated Strategic Transmission Investment (ASTI) approach, which made the incentive structurally skewed in favour of the companies. 

The net zero transition will not be successful if the enabling systems are not in place to facilitate this. As such, ongoing problems with the smart meter rollout remain a significant concern. Consumer trust is being damaged by continued delays and problems with their smart meters. While the Government leads the smart programme, it’s vital that Ofgem takes an active role in considering how its policies can deliver consumer benefits from smart metering. The regulator must also ensure that rules on resolving problems with smart meters are complied with.  

In relation to the retail market we support many of the areas of work Ofgem has planned. One area which should have greater prominence is support for people in debt, given the significant growth in total energy debt to almost £3bn, with further debts built up by consumers to pay for energy, through credit cards or arrears for other services. Ofgem has committed to carry out work in early 2024 on approaches for dealing with bad debt, and it’s important that Ofgem fully reflect this in their work plan. 

We’ve called for improved consumer protections in relation to debt, and for Ofgem to work with the Government to develop a joint plan that brings their complementary powers to bear. This should include additional resourcing for independent debt support, which can give holistic advice and help people find sustainable solutions to their debt issues across sectors. 

Ofgem should also place more emphasis on the pressing need for reforms to make the market more innovative and to upgrade consumer protections to enable people to confidently engage with low carbon products and services. It must also take a fully active role in ensuring the enabling technologies and systems that underpin the future market are delivered in a timely way and with maximum consumer benefit through its work on smart metering and market-wide half hourly settlement. 

We’re concerned that planned activity on issues like standing charges risks being a distraction that carries relatively little consumer benefit and doesn’t address the fundamental changes in the energy market over the coming years. At the same time, a focus on supplier investability through the price cap, without equivalent changes to improve the conditions for competition over the long term, risks creating a one way bet for incumbent firms.