Protecting consumers is Ofgem’s first priority. We do this by promoting competition, wherever appropriate, and regulating the monopoly companies which run the gas and electricity networks.
Other priorities and influences include:
helping to secure Britain’s energy supplies by promoting competitive gas and electricity markets - and regulating them so that there is adequate investment in the networks, and
contributing to the drive to curb climate change and other work aimed at sustainable development by, for example:
helping the gas and electricity industries to achieve environmental improvements as efficiently as possible; and
taking account of the needs of vulnerable customers, particularly older people, those with disabilities and those on low incomes.
How are we governed?
Ofgem is governed by an Authority, consisting of non-executive and executive members and a non-executive chair. Non-executive members bring experience and expertise from a range of areas including industry, social policy, environmental work, finance and Europe. The Executive members of the Authority are Ofgem’s Chief Executive and three Managing Directors.
The Authority determines strategy, sets policy priorities and takes decisions on a range of matters, including price controls and enforcement. The Authority's powers are provided for under the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998 and the Enterprise Act 2002.
Transparency
Ofgem endeavours to keep its operations transparent. Examples of practices that demonstrate this include:
publishing the minutes of its Authority meetings;
an annual open meeting of the Authority; and
full and thorough consultation in developing decisions (including the development of its corporate strategy).
How are we funded?
We recover our costs from the licensed companies we regulate. Licensees are obliged to pay an annual licence fee which is set to cover our costs. Ofgem is independent of the companies we regulate.
We operate under a five-year cost control regime that runs 2004-2009. It pegs our expenditure growth at 3 percentage points below the retail price index. This will reduce our costs by more than £5 million in real terms by 2010.