GovWire

In this joint DESNZ / Ofgem consultation, we have set out our initial proposals for code manager standard licence conditions and selection processes.

This follows our previous consultations:

• in 2019, we set out our desired outcome for energy code reform - an institutional governance framework that is forward-looking, agile, easy to understand, and able to accommodate a growing number of market participants
• our 2021 consultation and response stated our intent to establish a regulatory regime for new code managers as licensed bodies who would undertake current code panel and administrator roles
• we also proposed a new strategic role for Ofgem to provide direction for the codes development. The code manager licensing arrangements will be designed to ensure that strategic change can be delivered, effectively and efficiently

We are now developing the secondary legislation and regulatory framework for code managers, which will allow Ofgem to implement the reformed framework and drive strategic changes across the codes in the interest of consumers and competition. This consultation covers:

Code manager licence

We have set out the proposed high-level contents of the code manager licence, covering these priority areas:

• not-for-profit requirement
• setting budgets
• cost recovery and funding
• incentivisation
• conflicts of interest and independence
• financial and operational controls
• code maintenance and modification

Code manager selection

We have set out proposals for the secondary legislation that will underpin Ofgems code manager selection process, including:

• who will be eligible for selection
• how Ofgem will determine whether to pursue competitive versus non-competitive selection for each code
• how any non-competitive selection process would work
  

We also set out a view that the proposed selection route criteria speed of delivery and value for money may lead Ofgem to pursue non-competitive selection in many cases, such as where a code has not been consolidated and an eligible incumbent body already exists.

Responding to the consultation

The consultation is open to all, but we would specifically like views from:

• existing code parties
• existing code administrators
• wider industry players
• consumer groups
• academics

If responding via email, please copy your response to both the Department for Energy Security and Net Zero and Ofgem:

• codereform@energysecurity.gov.uk
• industrycodes@ofgem.gov.uk

Consultation webinar

Following the launch of this consultation, DESNZ and Ofgem invite you to join us for a webinar on Tuesday 26 March 2024.

During the event we will summarise our key proposals and answer questions on both this joint consultation and also on Ofgems separate but related energy code reform: implementation consultation.

If you would like to register your interest in attending, please email Ofgems Code Governance Reform team at industrycodes@ofgem.gov.uk. They will provide further information and joining instructions.