Response to Ofgem’s Call for Input on Energy System Cost Allocation and Recovery Review

Citizens Advice response to Ofgem’s “Energy system cost allocation and recovery review” 258 KB

Citizens Advice welcomes the opportunity to respond to Ofgem’s energy system cost allocation and recovery review. We recognise that the significant investment to move to a clean energy system should reduce bills over the longer term by reducing dependency on imported gas, but will also impact the make-up of consumer bills over the coming years. Citizens Advice supports Ofgem conducting this review to ensure that energy system costs are both allocated and recovered efficiently and fairly. However, it’s vital that this is simply the first stage of a broader process of work between Ofgem and the Government to consider the full range of options for managing energy costs on bills. Ofgem has proposed a new framework to review how energy costs are allocated and recovered, with the goal of creating a fairer and more efficient system for consumers. The framework assesses options based on their fairness, efficiency, and practicality, as well as their impact on affordability and the transition to net zero. It’s important that in applying this framework Ofgem builds on the comprehensive work done in earlier reviews like the Targeted Charging Review (TCR), which made changes to ensure consumers can’t avoid paying a fair share network costs.