Abolishing Ofgem is only worthwhile if what replaces it is fundamentally different.
Our proposal is for an Energy Consumer Commission (ECC) built around one principle:
The people who pay for and depend upon the energy system should sit at the top of its regulatory structure. Industry expertise should inform regulation, not control it.
1. The Consumer Commission
The highest decision-making body would be the Consumer Commission.
Unlike the existing model, its membership would be deliberately weighted towards people and organisations representing energy consumers rather than the energy industry.
It would include representation from:
- household consumer organisations;
- fuel-poverty organisations;
- disability and vulnerable-consumer organisations;
- pensioner representatives;
- social and private housing representatives;
- small and medium-sized businesses;
- energy-intensive businesses;
- rural and off-grid communities;
- consumer finance and debt organisations.
Appointments would be transparent and subject to strict independence requirements.
No regulated energy company would be entitled to a seat.
The Commission’s job would not be to determine the engineering specifications of an electricity network.
Its job would be to determine what outcomes the regulatory system must deliver for consumers.
2. Citizens’ Energy Panel
Professional consumer organisations still aren’t the same thing as actual consumers.
The ECC would therefore establish a permanent Citizens’ Energy Panel.
Members would be ordinary energy consumers selected to broadly represent Britain’s population and different energy circumstances.
For example:
24–40 consumers at any one time, including people from different regions, income groups, housing types and energy needs.
The panel should include experience of:
- gas-heated homes;
- electrically heated homes;
- heat pumps;
- prepayment meters;
- renters;
- homeowners;
- social housing;
- electric vehicles;
- households without cars;
- people with high essential electricity requirements;
- rural households;
- small businesses.
Membership would rotate every three months.
Members would be compensated for their time and provided with independent technical briefings.
Crucially, those briefings would not be written solely by the energy industry.
The purpose isn’t to turn consumers into energy economists.
It is to put the question regulators too often forget directly into the regulatory process:
Does this actually work for the person paying the bill?
3. Consumer representatives hold the power
This distinction is fundamental.
The Consumer Commission would make the regulatory decisions.
Technical specialists would provide the evidence necessary to make them.
That reverses the traditional relationship.
Instead of industry specialists determining what the energy system needs and subsequently considering how consumers will pay for it, the Commission would establish the required consumer outcome first.
For example:
Electricity must remain affordable.
The network must remain reliable.
Vulnerable consumers must be protected.
Investment must provide demonstrable consumer value.
The technical organisation would then determine how those objectives can safely and realistically be achieved.
4. Independent Technical Directorate
Energy regulation obviously requires enormous technical expertise.
The ECC would therefore contain an Independent Technical Directorate employing:
- electrical engineers;
- network specialists;
- economists;
- accountants;
- market specialists;
- cybersecurity specialists;
- data scientists;
- lawyers;
- generation specialists;
- consumer-behaviour specialists.
They would analyse proposals and advise the Consumer Commission.
But there is an important distinction:
They advise. They do not represent the industry.
Technical expertise would be recruited because of knowledge and competence, not because particular companies require representation.
Where specialist knowledge from an energy company is required, the regulator could call witnesses, request evidence or establish temporary technical working groups.
The regulated industry therefore gets a voice.
It does not get a vote simply because it is the industry.
5. Industry Technical Forum
There should nevertheless be a formal mechanism through which industry can challenge proposals.
The ECC would maintain an Industry Technical Forum containing representatives from:
generation;
transmission;
distribution;
retail suppliers;
storage;
nuclear;
renewables;
gas and dispatchable generation;
technology providers;
and major energy users.
Its purpose would be technical.
If the Consumer Commission proposed something physically impossible, unsafe or likely to undermine system reliability, industry experts need a formal mechanism for demonstrating that.
But the Industry Technical Forum would not be the governing board of the regulator.
It would publish its evidence.
The Technical Directorate would assess it.
The Consumer Commission would decide.
That creates a clear separation between:
expertise and power.
6. Consumer Challenge
Major regulatory decisions should undergo a formal Consumer Challenge before implementation.
Every significant proposal would have to answer five questions:
What does this do to the household bill?
Not eventually.
Not theoretically.
What is the expected impact in pounds per year?
What does it do to business electricity costs?
Britain cannot pursue an energy policy that makes domestic consumers slightly better off while making British industry internationally uncompetitive.
Who benefits financially?
Generators?
Networks?
Suppliers?
Government?
Consumers?
The distribution of benefits must be transparent.
Who carries the risk?
If forecasts are wrong, who loses money?
Consumers should not automatically become the party that absorbs every forecasting error.
What alternatives were considered?
The regulator would have to demonstrate why the chosen option provides better consumer value than credible alternatives.
7. An Energy Bill Impact Statement
Every major regulatory decision would therefore include an Energy Bill Impact Statement.
Similar to an impact assessment, it would show:
Typical household: +£X / -£X per year
Electrically heated household: +£X / -£X
Vulnerable household: +£X / -£X
Small business: +£X / -£X
Energy-intensive business: estimated impact
Alongside:
10-year system cost
Expected reliability impact
Distributional consequences
Principal beneficiaries
Consumers would finally be able to see what regulatory decisions actually mean for them.
8. Strict revolving-door rules
The new regulator would introduce significantly stronger independence requirements.
Senior decision-makers should not move immediately between regulated energy companies and regulatory positions.
Cooling-off periods would apply in both directions.
Relevant employment, consultancy, financial and pension interests would be publicly declared.
Where somebody possesses valuable industry expertise but has a potential conflict, they could still contribute through the Technical Directorate or as an expert witness subject to appropriate safeguards.
But technical expertise would no longer automatically translate into regulatory power.
9. Independent Consumer Advocate
There should also be an Independent Energy Consumer Advocate with powers separate from the Commission itself.
The Advocate could challenge ECC decisions where it believed consumer interests had been inadequately considered.
It could request information, commission independent analysis and require the Commission to respond publicly.
In exceptional cases, it could refer regulatory decisions for parliamentary or judicial scrutiny.
That means even the consumer regulator itself has someone challenging it.
No regulator should become unaccountable simply because we designed it with good intentions.
10. Parliament remains sovereign
The ECC would regulate the energy system.
It would not determine national energy policy.
Government and Parliament would remain responsible for strategic political decisions such as:
generation strategy;
energy security;
decarbonisation targets;
taxation;
subsidies;
and major public investment.
That distinction prevents politicians from outsourcing controversial political decisions to an allegedly independent regulator and subsequently claiming:
“Ofgem made us do it.”
Government makes policy.
The regulator protects consumers while implementing it.
NESO operates and plans the electricity system.
Industry delivers energy and infrastructure.
Each institution therefore has a clearly defined responsibility.
The structure
The model can be summarised very simply:
PARLIAMENT & GOVERNMENT
Sets national energy policy
↓
ENERGY CONSUMER COMMISSION
Consumer representatives hold regulatory authority
↕
CITIZENS’ ENERGY PANEL
Rotating ordinary consumers continuously challenge decisions
↓
INDEPENDENT TECHNICAL DIRECTORATE
Engineers, economists, lawyers and specialists provide evidence
↔
INDUSTRY TECHNICAL FORUM
Industry provides technical evidence and challenges feasibility
↓
REGULATED ENERGY SECTOR
Networks • Suppliers • Generators • Storage • Other regulated activities
Alongside the entire structure:
INDEPENDENT ENERGY CONSUMER ADVOCATE
Challenges the regulator itself
The fundamental change
Today the debate too often starts with the energy system:
What does the industry need?
What investment does the network require?
What return is necessary?
What market mechanism should we create?
And eventually:
What will consumers have to pay?
We would reverse that.
Start with:
What does Britain need energy to cost for households and businesses to prosper?
Then determine how to build and regulate an energy system capable of delivering it safely, reliably and sustainably.
Engineers should tell us what is physically possible.
Economists should tell us what different choices cost.
Industry should tell us what is operationally achievable.
Government should determine national strategy.
But ultimately:
Consumers should determine whether the system designed to serve them is actually serving them.
That is the fundamental principle behind replacing Ofgem.
Expertise informs the regulator. Consumers govern it.