Regulator ‘should have power to fine bosses of energy firms’

The head of the energy regulator has called on the government for the power to fine executives who breach rules as millions of households struggle with soaring bills and poor customer service.
Jonathan Brearley, the chief executive of Ofgem, said that the watchdog needs greater powers to hold the industry to account and tackle “very poor behaviours” at some companies and the individuals leading them.
The watchdog can impose fines on energy suppliers, generators and infrastructure providers that breach regulations and cause consumer harm. However, unlike the Financial Conduct Authority, the main City regulator, it does not have authority to publicly censure or levy financial penalties against the executives personally.
In an interview with The Times, Brearley, 51, said there were lessons that Ofgem could learn from the FCA.
“Part of the reason I look to the financial industry is because their regulator does have a broader range of powers. They’re able to hold executives to account, for example. So that if a director or a shareholder behaves in a way that damages customers, you can go after that person for compensation personally,” Brearley said.
Only 66 per cent of households are satisfied with the service they receive from their energy supplier, according to Ofgem’s latest consumer confidence survey, an improvement from the low of 62 per cent last year but still below 72 per cent before the pandemic.
Earlier this week, Ovo was forced to pay £2.4 million in compensation and redress payments for failings in handling customer complaints. Ofgem said that 1,395 Ovo customers were affected by lengthy delays in having their complaints addressed, with some waiting as long as 18 months.
Asked if that could include a crackdown on executive bonuses, similar to new powers set to be given to Ofwat, the water regulator, he said that was “to be decided”.
Labour has set out plans to give the water regulator the ability to ban bonuses if water quality standards are not met, under new legislation. Companies will also be made to ringfence spending for vital infrastructure rather than dividends, salary increases or bonuses.
“I think there are some fantastic companies in the energy industry. I’m not sitting here saying that everything is a disaster and everything needs to change,” Brearley said. “But I have to say, frankly, I’ve seen some very poor behaviours, both on an individual, as well as a corporate, level.”
Chris O’ Shea, the chief executive of Centrica, was paid £4.5 million for 2022, including a bonus of £1.4 million for “exceptional financial performance”, despite the scandal over British Gas, its retail supply arm, forcibly installing prepayment meters into the homes of vulnerable customers.
Ofgem is also consulting on a change in rules that would allow it to recoup money from failed suppliers under the insolvency process. Under the current regulations, suppliers that take on the customers of a failed rival can recoup the cost, which ultimately falls on billpayers.