The UK government strengthened the powers of energy regulator Ofgem under sweeping reforms announced in a statement on Wednesday, aimed at improving consumer protections and holding suppliers more accountable, the Department for Energy Security & Net Zero said.
The changes mark the first major update to Ofgem's remit since its creation in 2000 and are designed to reflect a more complex energy market, where consumers face a wider range of products and services, some of which are subject to limited regulatory oversight.
Under the overhaul, Ofgem will be granted authority to enforce consumer law directly, removing the need for lengthy court proceedings to secure compensation when customers are treated unfairly. The regulator will also gain new powers to penalize company executives, including the ability to ban bonuses where firms breach rules.
The reforms will refocus Ofgem's mandate on economic regulation and consumer protection, while expanding its ability to intervene in emerging or lightly regulated market areas.
The government said the changes would enable Ofgem to act as a "true consumer champion," ensuring fair treatment across the sector and adapting to evolving market conditions.
The move comes as concerns grow over gaps in regulation affecting certain groups, including heating oil customers, who have faced price spikes following the Middle East conflict. In response, the government recently announced more than 50 million British pounds ($67.6 million) in support for low-income households reliant on heating oil and pledged to introduce additional protections.
Energy Secretary Ed Miliband said the reforms would strengthen safeguards for billpayers and ensure tougher enforcement against companies that fail to meet standards.
"This government is fighting people's corner, and today we set out steps to strengthen protections for energy consumers," he said, adding that measures include banning bonuses for companies that break the rules.
Minister for Energy Consumers Martin McCluskey said the overhaul would deliver a fairer deal for households.
"Every household must be given a fair deal, and today we transform our energy regulator to give families stronger protections," he said. "We're giving Ofgem stronger powers to fight consumers' corner and introducing new measures so they can hold energy executives to account."
The government said the reforms are part of a broader effort to modernize energy market regulation and ensure protections keep pace with changes in how consumers access and use energy.