Regulatory Timeline: Gas and Electricity

“While much of the focus over the last few months has been on the dismantling of the subsidy regime for renewable energy, the rest of the energy market continues to evolve. Further steps are being taken to fill in the pieces in the jigsaw puzzle that is the roll-out of smart meters, and competitive tendering for new transmission lines is being extended onshore in a development of the approach used for OFTOs. Meanwhile, up to 132 onshore oil and gas exploration block licences are expected to be awarded by the Oil and Gas Authority and funding of the OGA itself is evolving. Last, but by no means least, the CMA investigation into the energy market continues, with the CMA deliberating on the remedies to impose following its provisional findings earlier this year.”

End September 2015 – Government consultation on new Smart Energy Code content and related licence amendments

The consultation closed on 1 September 2015 and the Government intends to publish its response by the end of the year.
It sought comments on proposed drafting on a number of topics to be added to the regulatory framework for smart metering. 

These include:

• the licence condition requiring enrolment of SMETS2 meters with the Data and Communications Company (“DCC”);
• requirements relating to incident management, public key infrastructure and smart metering testing;
• revisions to independence requirements of the organisation performing security and privacy assessments of DCC users; and
• obligations relating to the installation, maintenance and removal of communications hubs. 

1 October 2015 – OGA licence awards

The OGA expects it will make offers of award of licences for the exploration of onshore oil and gas for up to 132 blocks. These 132 blocks are subject to further assessment under the Conservation of Habitats and Species Regulations 2010 and are the subject of a consultation that closed on 29 September 2015. This follows the offer of award of 27 blocks on 18 August 2015 that were not subject to such further assessment. No licences have been or will be awarded in either Scotland or Wales as part of this 14th round due to the Scotland Bill and the Wales Bill. 

1 October 2015 – Regulations to fund the OGA

It is expected that Regulations will be brought in with effect from 1 October 2015 to fund the OGA between 1 October 2015 and 31 March 2016 by the apportionment of a £10.1m levy between the holders of offshore licences. The apportionment between offshore licence holders will be on a two-tier system depending on whether the licence holder produces hydrocarbons. Holders of other types of licences, such as onshore, are exempt in the short term. 

2 October 2015 – Consultation on Ofgem proposals for ensuring the right consumer outcomes for smart billing

The consultation is focused primarily on the related objectives of minimising backbills and estimated bills. It closes on 2 October 2015.
Ofgem proposes to put in place a time limit on the duration of backbills generated from consumption on a smart meter. The backbill limit will be implemented via suppliers’ licence obligations, to ensure a minimum standard of protection for all consumers.
Ofgem also want to encourage suppliers to publish their smart billing performance data, building on the existing publication of complaints data. 

October 2015 – Extending Competition in Transmission

Ofgem intends to introduce competitive tendering to deliver new, separable and high value onshore electricity transmission assets.
A consultation is expected in October 2015, and will cover the types of project to be tendered and how Ofgem will select them. 

30 October 2015 – Competition in Connections Code of Practice

On 30 October 2015, the Competition in Connections Code of Practice and new associated electricity distribution licence condition take effect. The Code of Practice specifies how the DNOs must provide services to their competitors in the connections market.
Ofgem plans to undertake a further review of the market in 18 months’ time to determine its success and impact on competition in the market. 

31 December 2015 – Offshore Transmission Owner competition rounds update

Ofgem expects to announce the preferred bidders for the Westermost Rough and Humber Gateway offshore windfarms in 2015. 

April 2016 – Energy market investigation

On 1 April 2015 the CMA published its provisional findings in the energy market investigations.
It found that a large proportion of consumers were not engaged with the market and had never considered switching provider, despite potential cost savings. Regulatory interventions that were designed to simplify prices were not having the intended effect of increasing consumer engagement and might even have reduced competition.
The CMA is considering a range of remedies, including transitional price caps. Having extended its timeline, the final report is expected by April 2016. 

1 April 2016 – Regulations to fund the OGA

It is expected that a new set of Regulations will be brought in setting out the rate of levy for the period 1 April 2016 to 31 March 2017.