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Ofgem reveals reorganisation around consumer protection principles

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Ofgem is to restructure itself around three core divisions in a streamlining exercise intended to initiate a greater focus on protecting consumers.

One of the three new divisions will focus on system operation and networks, concentrating resources on the next round of network price controls due to start in 2021. As well as leading on the RIIO framework, the section will also head-up the regulator’s work with network companies as they transition to a Distribution System Operators (DSOs).

Ofgem has issued numerous warnings to network operators that the next set of RIIO controls to run through the 2020s will be tougher following increased pressure on the energy market to limit costs to consumers.

The other divisions will see a consumers and markets team look after the interests of consumers in the energy market. Its remit will include both wholesale and retail markets as well as enforcement against suppliers, and will also be responsible for implementing the government’s proposed energy bill cap.

Finally, a corporate & scheme services division will provide business support services to Ofgem and run environmental schemes for government.

At the same time, Andrew Wright, senior partner for energy systems, and Chris Poulton, managing director for E-Serve, have decided to leave the organisation over the next few months. 

Ofgem have made clear that the pair have not been made redundant as part of the restructuring of the regulator, however direct replacements will not be taken on as “their positions no longer exist in the new structure”.

Chief executive Dermot Nolan said: “I would like to thank Andrew Wright and Chris Poulton for their enormous contribution to Ofgem. I have appreciated their support during my time at Ofgem and wish them well in their future careers.”

More details on the reorganisation will be published in March ahead of the reorganisation taking place in April.

It is not clear if the streamlining exercise will impact Ofgem’s budget, which for 2016/17 stands at £86 million. The next annual report, to be released in the summer, will contain the latest figure.

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