The governments draft legislation on energy should be amended to ensure decisions the regulator makes are transparent and open to appeal, the cross-party Energy and Climate Change Committee has recommended in a report published today.
The committee has been scrutinising the Government’s draft legislation on energy, published earlier this year. The draft Energy Bill would give Ofgem new powers to change industry codes and enables the regulator to run competitive tenders for the design and construction of onshore transmission assets.
Energy and Climate Change Select Committee chair Angus MacNeil said: “The Government’s draft legislation is a step in the right direction. The energy industry has for too long been able to decide when to change the way it engages with the energy market. This has not served consumers well.”
He said that the needs of consumers need to be clearer and the industry should also have a right to appeal. “In the interests of clarity and transparency, we believe that Ofgem should publish an impact assessment of any changes it proposes to make. Likewise, industry should continue to have a right of appeal against any changes with which it disagrees on merit.”
The committee said the proposals to introduce competitive tendering for onshore transmission are “a positive move in principle”, but that the decision to tender a projects needs to be transparent and the process needs to avoid delays. MacNeil said ”We have concerns about the potential delays to projects created by the tendering process, so we suggest that when Ofgem makes a decision about tendering it once again publishes an impact assessment so that industry, communities and consumers are able to understand the reasons behind the decision Ofgem has reached. This will ensure once more that bill payers remain the focus of the Government’s proposals.”
The draft legislation also extends the Secretary of State’s powers to oversee the roll-out of the smart meter programme. MacNeil urged the government to go further and set the responsbilities of all those involved: “The Secretary of State should continue to have oversight of this nationally important scheme, but the ongoing concerns about whether the 2020 roll-out deadline can be met should not be ignored. We are calling for Ministers to set out clearly the responsibilities of all those involved in the roll-out and to ensure that they are able to deliver on them.”
The MPs additionally recommended that:
• Government should consult further with Scottish stakeholders to ensure that there is a level playing field for transmission projects across Great Britain.
• Ministers should amend the proposals so that competition for onshore distribution is subject to its own impact assessment before being introduced
• Government ensures its proposals are “future proof” so that suppliers are able to match the amount of energy they buy to the amount consumers use based on shorter periods than half-hourly settlement
Read the full report: Pre-legislative scrutiny of the Government’s draft legislation on energy