Ofgem will gain new powers to fine energy suppliers and brokers, curtail executive bonuses and order compensation for mis-selling under an energy bill to be introduced Wednesday, the UK government said.
Energy brokers who arrange business supply contracts have operated largely without regulation, allowing some to push small businesses into overpriced deals while collecting hidden commissions. The government estimates the crackdown will save businesses more than £100m annually. Ofgem will now oversee these brokers and price comparison services.
The watchdog will also restrict bonuses for executives found to have "rewarded themselves while customers suffer", following public anger at large payouts to energy company bosses during investigations into treatment of vulnerable customers. Energy secretary Miatta Fahnbulleh said, "When energy bosses fail their customers, they shouldn't be walking away with bumper bonuses while families and businesses pick up the bill."
The energy independence bill also includes provisions to strengthen local authority powers against landlords breaching energy efficiency standards, with fines up to £30,000 for letting properties rated below E on energy performance certificates. The government will introduce a moratorium on new onshore fracking licenses in England, though excluding lower-volume operations and "proppant squeeze". Minister Katie White said the government was "putting communities first and protecting them from the risks of earthquakes and unsafe drilling". Tony Bosworth, an energy campaigner at Friends of the Earth, said the exemptions were an attempt to "creep in through the back door under a different name". The government said low-volume activities fell outside the ban's scope and it had no evidence they posed equivalent risks to high-volume fracking. Prof Stuart Haszeldine of the University of Edinburgh has stated that earthquakes from lower-volume fracking can be as large and unpredictable as those from high-volume operations.