The UK’s energy regulator Ofgem has opened a call for input on the regulations surrounding households who wish to disconnect from the gas network.
With the increased prominence of heat pumps and other electric and low-carbon heating technologies, an increased number of UK energy consumers are seeking to disconnect from the gas network in order to avoid paying daily standing charges for a supply they no longer use. However, consumers who wish to disconnect from the gas network voluntarily face upfront costs of an average of £1,950, expected to increase to approximately £2,300 by 2030.
As such, Ofgem is now seeking to reform the regulations surrounding voluntary disconnection from the network, in order to ensure they are fair, balanced, and easy to understand. The regulator notes that consumers have stated that the current process to disconnect their supply is costly and a barrier to those wishing to transition away from gas. Additionally, Ofgem states that it has become aware of reports that the current gas disconnection regulations are complex and difficult to navigate, which it claims is “exacerbated by a lack of clear guidance available for consumers on how the process works in practice”.
In reforming the regulations, Ofgem is keen to ensure that costs for gas disconnection prices do not continue to rise, while also making sure that those who choose not to disconnect from the gas network, who are often some of the most vulnerable consumers, are not faced with higher costs if gas providers raise costs to make up for losing customers. The regulator is also anxious to avoid changes bringing in “a weak and outdated gas disconnections framework which fails to clarify roles and responsibilities and set clear expectations for industry, regulators and consumers” which could “prevent an orderly decommissioning of the gas network”.
Ofgem is asking gas industry stakeholders and consumers to comment on the current effectiveness of gas disconnections framework, as well as the considerations a potentially updated disconnections framework should consider. Additionally, gas providers are being asked to inform Ofgem of the step-by step process for a gas disconnection, as well as the volumes of disconnections that have been carried out to date.
Following the call for input, the regulator will take the responses and “assess the ability of the existing framework and any potential future framework to protect the interests of consumers and deliver UK’s net zero emissions target at lowest cost to consumers.”
In the opening of the call for input, Ofgem stated: “We consider the ability of consumers to exercise their choice to disconnect from the gas network and electrify their homes and businesses to be integral to the interests of current and future energy consumers, including their interests in the Government meeting its net zero targets. We are conducting this review to examine the framework ahead of an expected increase in heat pump uptake to meet ambitious government targets. Responses to this call for input will help us identify areas for improvement and help us shape the regulatory framework for the future.”
This is the second call for input Ofgem has launched this year, having last week opened a call for responses into regulations surrounding the capacity market.
