1. Our response
Summary
Consumer Scotland welcomes Ofgem’s work to develop a comprehensive, future-proofed set of rules for the retail market in order to provide better outcomes for energy consumers. We broadly think this is the right direction of travel given the changes in the market we are currently seeing and may expect in future. We also agree that a phased approach is appropriate, with an initial focus on billing.
The energy market has changed significantly in recent years – among other things the changing generation mix has increased fixed costs and the potential value of flexible demand, smart meters have improved the quality of consumption information, and consumers increasingly receive information in digital form rather than on paper. The changes will continue, with the advent of half-hourly settlement providing the means for suppliers to introduce more sophisticated tariffs that reward consumers that are able to shift their usage to different parts of the day, and benefit consumers more widely by reducing the need for system upgrades.
These changes, if implemented sensitively and with appropriate support, could be very positive for consumers. However, there is also a risk that the market becomes too complicated for a significant minority of consumers, with end result that the more engaged benefit, while others – possibly including those already disadvantaged - struggle further to engage.
It is critical, therefore, that Ofgem’s rules keep pace with the changes we are seeing. It is unlikely that prescriptive rules are the best way to do this. In a rapidly changing market, as suppliers and others seek to innovate there is a risk that specific, well-intentioned rules could prevent good outcomes for consumers as well as bad. For instance, app-based communications present an opportunity to deliver information to consumers in a more intuitive, even individualised, way that isn’t possible with a standardised paper bill. Further, what works for a standard flat-rate bill structure may not work as well for more complicated, dynamic charges that are likely to become more prevalent over time.
Accordingly, we would like to see a hybrid approach to regulation adopted, broadly in line with option 3 presented in the consultation, whereby those areas where there is no scope for innovation or competition are covered by the Guaranteed Standards of Performance or prescriptive rules – for example obtaining accurate meter readings – and other areas are covered by outcomes-based rules.
The success of this model will rests heavily on Ofgem’s ability to effectively monitor and enforce a less specific set of rules. We welcome the strong emphasis on monitoring, compliance and enforcement within the consultation. Ofgem’s approach should be risk-based. It should be relatively easy to identify poorly-performing suppliers from existing complaints and other datasets. Attention should be focused on these suppliers, for instance by periodically requesting and testing samples of customer communications with focus groups, and cross-comparing supplier processes and procedures to highlight weaknesses.
It should also be possible to identify more complex tariffs or offerings and devote specific attention to these – in general our view is that the more complicated or sensitive an offering is to changes in customer behaviour the harder a supplier should have to work to ensure that it communicates effectively with and supports the customer. Suppliers’ ability to support vulnerable consumers should also be carefully monitored, as overall numbers may mask a situation in which their processes work for a majority but fail those with specific needs.
We would also highlight that the range of actors alongside energy suppliers operating in the retail energy market is expanding rapidly, including, for example, third party intermediaries, load controllers and energy smart appliance manufacturers. Ensuring there is consistency in how consumer outcomes are applied across these will be essential, and is also part of the enforcement agenda.
Finally, while we expect that it is implicit in Ofgem’s thinking, we would welcome confirmation that consumers’ ability to compare information across suppliers is a fundamental part of the billing principles. The principles should not leave room for a supplier to give information about their stable of offers in a manner that is compliant with the rules, but which makes it difficult or impossible for the customer to compare this with offers available elsewhere. If not reflected directly in the rule wording this should be made clear in supporting guidance.
We thank Ofgem for the opportunity to respond to this consultation and would be happy to discuss any of our responses further if that would be helpful.
Our Response
Question 1: Do you agree with our initial monitoring approaches for the other Consumer Outcomes outlined in Appendix 1, and the data and evidence we need for each of them? If not, please provide more detail on this, including alternative metrics.
In general, we agree with the initial monitoring proposals, with three additional suggestions.
Firstly, it may be helpful to illustrate impacts on real world households, particularly in relation to prices. This could, for example, be delivered through modelled changes to bills paid by archetypes already used by Ofgem[i].
Secondly, there should be an explicit recognition of the role of direct support, and information collected and provided by frontline energy advice organisations. Any unintended effects, particularly those which impact vulnerable consumers, could be visible through advice data more quickly than through longer term supplier complaints data.
Relatedly, Ofgem and DESNZ should work closely with consumer and advice bodies as well as the Energy Ombudsman to ensure they are sufficiently resourced to provide the data that Ofgem requires with regard to its complaints monitoring proposals. This is particularly important given the expanding range of actors providing goods and services to consumers in the retail energy market (e.g., TPIs, load controllers etc.) and the level of additional complexity this could mean for data collection as well as the effective resolution of consumer complaints.
Thirdly, we recognise the need for further work to better understand how the outcomes could be delivered in the non-domestic sector. We would welcome the opportunity for further engagement in that area
Outcome 1: Consumers are charged energy prices that represents fair value
We agree with the proposed approach for domestic consumers. Consistent and continued tracking of complaints data will help ensure that benefits of new approaches can be evidenced over time.
In the non-domestic market, we note the need for further engagement with stakeholders before agreeing what fair value means in this context. Consumer Scotland’s small business survey research finds:
- Of those businesses using energy goods and services, 45% felt that they did not pay a fair and reasonable price for them and 31% did not feel that their terms and conditions were fair.
- 20% of Scottish small businesses reported being dissatisfied with goods and services purchased in the energy market compared to 11% in the water sector, 5% in the postal sector and 4% in the financial services market.[ii]
We would welcome the opportunity to be involved in discussions about what fair value means for those engaging in the non-domestic market, in particular small and micro-businesses.
Outcome 3: Consumers struggling to pay for their energy receive flexible payment options and proactive, tailored interventions
We agree with the approach proposed, with the additional suggestion that energy advice bodies should be explicitly recognised as a useful source of evidence of any emerging issues.
Outcome 4: Consumer concerns and complaints are addressed fairly, effectively and promptly
There is a risk that it may be more challenging for advice bodies to pursue resolution for consumers in an outcomes-based model, as there is a wider range of ways in which suppliers may be meeting their obligations. Therefore, determining if they are doing so or not becomes more challenging. We would suggest that Ofgem and DESNZ should work closely with consumer and advice bodies as well as the Energy Ombudsman to ensure they are sufficiently resourced to provide appropriate assistance to achieve this outcome, in addition to providing the data that Ofgem requires with regard to its complaints monitoring proposals.
This is particularly important given the expanding range of actors providing goods and services to consumers in the retail energy market (e.g., TPIs, load controllers etc.) and the level of additional complexity this could mean for data collection as well as the effective resolution of consumer complaints in line with consumer outcomes.
Outcome 5: Consumers get clear, accurate and timely advice information to help them make informed choices
As with other outcomes, it would be helpful to make explicit the expected role of energy advice bodies in achieving this.
In addition, much more detail is needed on how the non-domestic sector will be engaged and supported in relation to this outcome. Small business consumers have less easy access to information – notably, a lack of comparison websites – may also be time pressured, and have fewer consumer protections (e.g., price cap, cooling off periods for contracts).
Comprehension testing and/or mystery shopper assessments could be useful in this sector, especially as the range of goods and services, and the number of actors providing them in the retail energy market, expands. For example, TPIs, load controllers, ESA manufacturers.
Consumer Scotland is about to commission research on small businesses experiences of using energy brokers and consultants to secure their energy supply and understand these in relation to their understanding of the wider non-domestic energy retail market which will contribute to understanding around this outcome.
Outcome 6: Consumers can switch providers and contracts without unnecessary barriers
No additional suggestions, beyond the point that advice bodies will be best placed to highlight any negative unintended consequences under this, as other headings.
Outcome 7: All products and services should be reliable and perform as intended
It will be important for Ofgem to be clear on the definition of ‘supplier’ and if and how it incorporates the evolving range of actors who supply goods and services in the energy retail market. In particular, as more households take up low carbon technologies, outcomes will relate to the interaction between retail and physical products – for example, effective electricity prices will be increasingly strongly influenced by the use of home batteries, or by the use of EVs.
Question 2: To help minimise the burden of data collection, do you have any views on data collections we can streamline or retire?
While we support appropriate levels of data collection, we consider it is premature to consider this question in advance of market changes. Given new approaches may result in unintended negative consequences as well as benefits, it is important to maintain current data, at least initially, to ensure any such issues are captured.
Building on this and our response to question 1 above, we would also highlight the importance of a holistic evidence base, especially from the advice sector and consumer organisations who conduct consumer research and see consumers when they are struggling most across all suppliers.
Related to this, it is important to consider the burden on the advice sector and ensure that any new data collection requirements are appropriately resourced. Advice organisations and charities can provide valuable independent evidence on consumer experiences and outcomes, particularly for consumers who may not engage directly with suppliers’ complaints processes. Where Ofgem seeks to streamline or retire existing data collections, it should ensure that this does not reduce the availability of independent sources of evidence that can be used to supplement supplier performance data. Any review of reporting requirements should therefore focus on removing duplication and low-value collections while preserving information that helps identify consumer detriment and assess whether outcomes are being delivered in practice.
Question 3: How can we best ensure that all stakeholders have a consistent understanding of the Consumer Outcomes we expect suppliers to deliver? Do you have any views on initial proposals to do this?
We agree with the consultation proposal that there may be advantages in condensing previously published material into a single outcome-focused document, to which all stakeholders can refer, backed up, as now by prescriptive rules.
Given both the speed of change in the energy sector, however, and also the likely need to refresh it on the basis of early experience of implementation of the outcomes framework, we would suggest that such a document would need frequent review. Ofgem should consider an initial review within 12 months of initial implementation, followed by regular but less frequent reviews thereafter. This should be subject to more frequent reviews if Ofgem monitoring identifies material issues. The timetable and process for those reviews should be set alongside its initial publication to provide stakeholders with clarity and confidence that expectations will remain current and reflect emerging evidence.
Implementing a Billing Outcome
Question 4: How can we best manage dependencies between outcomes?
We welcome the intention (para 4.12) to require suppliers to have regard to overall impacts when delivering each individual outcome. Current complexity of bills can be seen as a result of successive changes, each individually well intentioned, but which taken together have made bills less accessible overall.
While we recognise there are difficulties in setting boundaries between different issues, we would suggest that the influence of metering on billing complaints be considered separately. Bill redesign and timing are clearly important issues, but incorrect billing as a result of metering issues is arguably more fundamental.
Billing – Rule Change
Question 5: Do you agree with the range of rules we have identified relating to the billing outcome? Are there any other rules which you consider should be included?
We broadly agree that the identified SLCs and GSOPs should be within scope of this reform. However, there are other relevant SLCs that Ofgem must have regard to as part of this reform. Inclusion of these conditions is not to suggest that they should be considered for removal. However, it is important regard is given to them here and in any future guidance on good billing outcomes:
- SLC 0 (Treating Domestic Customers Fairly) and SLC 0A (Treating Non-Domestic Customers Fairly) – Ofgem must consider how billing outcomes interact with SLC 0 and 0A and that any guidance make explicit reference to fair billing outcomes.
- SLC 27.13-16 that relates to the setting of regular direct debit payments. The consultation document attributes 38% of Money Advice Trust sample complaints to “catch-up bills”, linking this issue to “low direct debits, estimated bills, and poor communication”. As a top driver of billing complaints, adequate direct debit calculations should sit inside the accurate and timely billing outcome.
- Prepayment Meter (PPM) customers receive equivalent billing information through top-up statements, in-home display data and/or energy supplier smartphone applications. Excluding SLCs that relate to PPM billing information (e.g. SLC 28) risks creating a two-tier billing standard and worse outcomes for PPM consumers.
Question 6: Of the suite of options presented, do you have a preference? What is the rationale behind your preference?
Of the suite of options presented, Consumer Scotland prefers option 3. The rationale for domestic consumers is based on (i) the prevalence of billing issues as seen from advice sector data in Scotland; (ii) some billing regulation provides a fundamental level of protection where there likely to limited scope for innovation from suppliers; and (iii) the level of risk of consumer detriment from unforeseen or unintended consequences that may result from removing some prescriptive rules.
Billing issues continue to be prevalent issue for energy consumers in Scotland seeking third party advice. Data from Advice Direct Scotland (‘ADS’) highlights that billing issues represent 35% of their total cases received for domestic consumers and 39% of their total cases received for non-domestic consumers, between May 2024 to May 2026[iii][iv]. While the Heat Network advice service is still new, and the total number of queries is low, billing issues already represented 21% of the total number of heat network related queries received.
Analysing the types of billing issues ADS received, the five most prevalent issues are highlighted below.[v]
Table 1: ADS Domestic Billing-Related Issues between May 2024 and May 2026
|
Domestic billing-related issue |
Percentage of total domestic billing related issues |
|---|---|
|
Responsibility for Paying Bill Disputed[vi] |
19.95% |
|
Price Tariff Information |
14.75% |
|
Inaccurate Actual or Inaccurate Estimated bill |
13.08% |
|
Direct Debit Issues |
12.38% |
|
Multi-rate or Complex Meter Billing Issues |
5.92% |
Similarly, Ofgem’s recent Domestic Billing Performance Assessment found that billing is one of the most common drivers of consumer complaints to both suppliers (30% of complaints) and the Energy Ombudsman (55% of referrals)[vii].
Therefore, any changes to billing regulations will need to be clear on how the supplier-led innovation it allows will improve consumer outcomes. This is not clear in the consultation document. In some instances, the proposed options appear to only risk removing basic consumer protections that suppliers are unlikely to be able to innovate on.
For example, options 1 and 2 propose removing all of SLC21B and would necessarily include removing requirements on energy suppliers to take all reasonable steps to obtain new meter reading data from consumers if they believe that a provided meter reading was not reasonably accurate[viii].
However there is limited scope for supplier-led innovation to improve on this requirement as the condition is not prescriptive about how suppliers identify erroneous meter reads or bill accurately, but rather that they must do so. Therefore removing this obligation undermines a minimum expectation that suppliers act to prevent inaccurate billing, and a fundamental safeguard for consumers, while suppliers are already free to innovate in the methods used to identify and resolve suspected issues.
Finally, options 1 and 2 risk consumer detriment in billing areas that are already common areas of consumer detriment. Inaccurate actual or inaccurate estimated billing is the third most prevalent issue in the ADS data in table 1. However, as highlighted above, options 1 and 2 propose to entirely remove SLC21B that provides an important safeguard against inaccurate bills. A supplier will be best placed to identify an inaccurate meter reading at the earliest opportunity, where it is erroneously submitted by a consumer or is due to a smart meter fault. Therefore SLC21B.1 and 2 play an important role in minimising consumer detriment and should not be removed.
Ofgem should also consider the effect of billing issues on small businesses, and how the SLCs for small and microbusinesses apply. Previous Consumer Scotland research found that nearly 1 in 5 (18%) of small businesses surveyed felt that their billing arrangements were not easy to understand[ix]. Case data from the advice line energyadvice.scot shows small businesses reporting problems with billing[x]. For example, one small business was billed unexpectedly large sums (tens of thousands of pounds) with significant negative impacts on the business, including around the payment of wages. The small business reported ongoing confusion and uncertainty around the accuracy of billing and meter reading and coordination between the TPI and the supplier.
While there are currently fewer prescriptive billing protections for non-domestic consumers, the evidence suggests that billing issues remain a significant source of detriment for small and microbusinesses. As with domestic consumers, there appears to be limited scope for meaningful supplier-led innovation in relation to fundamental billing standards, such as ensuring bills are accurate, understandable and based on appropriate consumption data, while the removal of existing protections risks increasing consumer detriment. Therefore, Consumer Scotland considers that Option 3 provides the most proportionate approach, retaining essential safeguards while still allowing suppliers flexibility to innovate in how they deliver billing services, and is best aligned with protecting the interests of small and microbusiness consumers.
Question 7: If relevant, what is the impact of each option on supplier costs? Please provide any supporting evidence.
No answer.
Billing – Monitoring
Question 8: Do you agree that the data and evidence we are asking for to monitor the Billing Outcome will give us the evidence we need to hold suppliers accountable for delivering the right outcomes for consumers? If not, please explain your reasoning, including any alternative sources of data and evidence you think appropriate. For suppliers specifically, could you tell us how you already monitor your customers’ experience of receiving accurate, timely, accessible and understandable bills?
Consumer Scotland broadly agrees that the proposed data and evidence would provide Ofgem with a useful starting point for monitoring delivery of the Billing Outcome and identifying suppliers that may present a higher risk of consumer detriment. However, we consider that monitoring should draw more systematically on evidence from consumer and advice organisations, including data that captures issues experienced by consumers who may not engage directly with suppliers or Ofgem. There is a risk that suppliers will have greater resources and opportunities to add to the evidence base, creating an imbalance if independent consumer evidence is not given sufficient weight. Ofgem should therefore be clear about how different sources of evidence will be weighted and interpreted, including what significance is attached to consumers needing to contact their suppliers with an issue, seek independent advice and advocacy, or escalate a complaint. Consideration should also be given to how different consumer outcomes are weighted, including the experience of consumers in vulnerable circumstances and those living in areas of higher deprivation.
We also encourage Ofgem to complement quantitative monitoring with a stronger qualitative approach. The proposed metrics should help identify suppliers whose performance warrants further scrutiny, but this should be followed by more in-depth assessment, including engagement with consumers through focus groups and direct examination of suppliers’ billing processes, communications, complaint handling and customer interactions. As outcomes cannot always be fully captured through numerical indicators alone, qualitative evidence will be important in understanding the causes and impacts of poor billing practices. In relation to non-domestic consumers, Consumer Scotland would welcome the systematic collection and publication of data on bill accuracy and other billing-related issues affecting small and microbusinesses. Publishing this information in an accessible format could support more informed decision-making by non-domestic consumers, while ongoing coordination with consumer and advice bodies would help ensure emerging issues are identified and understood at an early stage.
Question 9: Do suppliers foresee any challenges with the data and evidence we propose below? Please provide detail and examples in your response to help us understand the feasibility of our proposal.
No answer.
Question 10: How often should this data and/or evidence be collected?
Advice organisations will be best placed to answer this. We reference our answer to question 8 with regards how important this data will be for capturing the full picture around consumer detriment and whether good outcomes are being achieved. Ofgem must work with advice organisations to make this process as streamlined and easy as possible given the likely additional workload this will place on many organisations.
Billing – Compliance and Enforcement
Question 11: What aspects of the Compliance Operating Principles do you anticipate will need to be developed to ensure compliance activity is balanced, proportionate, and efficient when assessing consumer outcomes?
As we set out above, we welcome Ofgem’s strong focus on monitoring and enforcement in this consultation. The Compliance Operating Principles are an important feature of this, especially around how non-supplier data (e.g. advice sector monitoring) can support Ofgem’s role as a regulator.
We encourage Ofgem to work closely with advice bodies and consumer organisations to best utilise their data to support and improve Ofgem’s monitoring function in larger cases. For example, recent compliance action around involuntary installation of prepayment meters took more than three years to complete. Slow action by regulators, especially in such high-profile cases, damages consumer trust and confidence in the market, and leaves directly affected consumers without timely and appropriate redress.
Therefore, we recommend that Ofgem review where the Compliance Operating Principles can be reformed to allow investigations to be both robust, and more efficient, so that enforcement action can completed in a timely manner. We reference our answer to question 8 and the need for more qualitative evidence to properly assess if good outcomes are being achieved.
Billing - Stakeholder Engagement
Question 12: How can we improve engagement to ensure all stakeholders share a common understanding of our billing rules? Are you supportive of us developing a Billing Outcome guidance document? How can we improve informal engagement?
We are supportive of a Billing Outcome guidance document that is developed with input from all industry stakeholders, and is maintained over time, especially as energy consumer markets are changing and innovating. It is important that guidance and rules are clear, for both consumers and suppliers, what the regulator’s approach to enforcement will be, and how its monitoring work identifies a supplier is not delivering in line with guidance.
In the production of this guidance, Ofgem should consult with the industry as whole to understand good practice, case studies and clear guidance for what good outcomes means for a range of different consumers. To date there is little clear guidance from the regulator on what its expectations are around the billing outcome for either domestic or non-domestic consumers. Different consumer types may require different treatment, such as potentially more support for consumers in vulnerable circumstances. To ensure that guidance is relevant to all of these different groups, Ofgem should consult a variety of groups in the creation of it, including industry and consumer groups and charities.
Further, any guidance documentation must remain relevant and timely. This will be especially important as the retail energy market changes with the introduction of new products built on Market Half Hourly Settlement (MHHS), Consumer Led-Flexibility (CLF) opportunities, and an array of new smart technologies and third-party intermediaries (TPIs).
To stay relevant and useful to consumers, suppliers and other regulated parties, Ofgem must provide timely updates to any Billing Outcome guidance, and other guidance on other areas of regulation. Other regulators provide this through regular update documentation to clarify rules and expectations. For example, the FCA communicates what a “good outcome” is through a mix of high-level principles, specific rules, and targeted guidance. The FCA uses “Finalised Guidance” publications to clarify rules and explain how suppliers and other stakeholders should comply with them. A recent example of the FCA responding to changing markets, has included Finalised Guidance on financial promotions on social media, setting out expectations on not just firms, but social media influencers, when communicating financial promotions on social media[xi].
With a changing retail market, Ofgem should adopt a similar programme of updates to ensure that its rules and expectations remain clear and transparent for consumers, suppliers and other regulated parties. One potential vehicle to deliver this is in annual work programmes produced by Ofgem could be a good forum to communicate to stakeholders when it will be delivering updates to different rules and guidance.
Question 13: How can we improve transparency of our billing activities and how stakeholders have shaped our work?
To strengthen stakeholder confidence and accountability, Ofgem should produce a regularly-updated roadmap that sets out key milestones, upcoming engagement opportunities and decision points through the programme. This provides a clear indication to stakeholders to understand progress and identify opportunities to contribute.
Ofgem should also provide greater visibility of how stakeholder feedback has influenced policy development through a clear “you said, we did” approach, and a rationale where alternative approaches have been adopted.
Finally, there is an opportunity to improve transparency through the publication of more sub-national data, including data that highlights the experience of Scottish consumers. Reporting at a sub-national level would help ensure consumer experiences are understood and reflected in the development and monitoring of outcomes-based regulation. The RTS signal switch-off has been a recent example of why sub-GB level data can help ensure that the regulatory response to an issue must consider the experiences of consumers in different parts of the UK. While many consumers across GB had RTS meters, communities on the islands of Scotland faced particular issues around getting adequate engineering resource to meet the demand for meter appointments. While GSOPs were considered before supplier performance improved, the production of sub-GB level data around consumer outcomes could have reinforced reports from advice sector organisations and charities to address this issue more quickly and reduce issues faced by consumers in these communities.
GSOP Framework
Question 14: Do you agree with our proposals to introduce an automatic inflation based uplift mechanism for supplier GSOP payments?
Consumer Scotland supports the introduction of an automatic inflation-based uplift.
As identified in the consultation document, the purpose of GSOP payments is to provide quick compensation to consumers, improving consumer confidence and trust, while providing clear signals to suppliers about the expectations of minimum levels of performance and to minimise the frequency of poor supplier service.
The value of GSOP payments was increased to £40 in November 2024 following Ofgem’s statutory consultation in August 2024[xii]. However, this was the first and only uprating of the payment since the original £30 payment level was set in The Electricity and Gas (Standards of Performance) (Suppliers) Regulations 2015 (the ‘2015 Regulations’). The 2024 uprate was in line with the Consumer Price Index with Housing (CPIH) at the time[xiii]. However, the lack of an automated mechanic to uprate GSOP payments before this meant that the real value of GSOP payments before Ofgem’s statutory consultation in August 2024 had reduced, especially after the higher rates of CPIH inflation during 2021-2023. In addition, the 2015 Regulations require suppliers to make an “additional standard payment” if the initial compensation payment is not issued within 10 working days. As this additional payment is set at the same value as the original payment (e.g. £30 between 2015 and 2024), any failure to uplift GSOP payment levels would erode the real-terms value of both payments. Consequently, consumers who experience sustained poor service would receive compensation that is worth less in real terms on two separate occasions.
Failure to uprate the GSOP payments in line with CPIH inflation risks undermining their effectiveness as a tool to send clear signals to suppliers about the expectations of a minimum level of performance for consumers. Ultimately this can undermine consumer confidence and trust in the market.
The 2024 uplift was a welcome step in restoring the real-terms value of GSOP payments. However, an automated, CPIH inflation-linked, uplift mechanism would ensure that GSOP payments maintain their effectiveness over time, ensuring that GSOP compensation remains proportionate to prevailing household costs. A similar mechanic already exists for Distribution Network Operator (DNOs) GSOP payments[xiv]. Extending this approach to energy supplier GSOP payments would maintain consistency across the sector and provide a simple and predictable framework for consumers, advocates, and the industry to follow.
Question 15: Do you agree with our proposal to repeat payments for the existing GSOPs related to consumers being off-supply?
Consumer Scotland agrees with Ofgem’s proposal to introduce repeat payments for existing GSOPs related to consumers being off supply contained in regulation 5 and 6 of the 2015 Regulations.
Loss of electricity or gas supply can cause significant consumer detriment, particularly when outages are prolonged. A repeat payment mechanism provides an appropriate means of recognising that detriment increases as the duration of the service failure increases.
Given both the aim of GSOP payments and the larger energy redress landscape, repeat GSOP payments are preferable to variable or discretionary compensation arrangements. A repeat payment is predictable and easy for consumers to understand, can be readily automated by suppliers, and supports prompt consumer compensation. It provides a clear incentive for suppliers to resolve issues quickly, ensuring that service failures are not deprioritised after the initial GSOP payment is made, or while a variable amount is to be decided upon by suppliers, consumers or any third-party involvement.
Variable payments would add complexity into the system, such as how levels are determined for a particular incident, whether they can be challenged by consumer or supplier, and this risk of disputes would prolong consumer wait for compensation and overlap with the existing role of alternative dispute resolution by the Energy Ombudsman that can administer more complex cases and will have power to require particular compensation for consumers[xv].
Ofgem should consider repeat payments that escalate over time for other GSOPs as well. An escalating structure could strengthen incentives for suppliers in other areas and more accurately reflect increasing detriment experienced by consumers who suffer with prolonged issues.
Question 16: Do you agree with our suggested mitigations for the repeated payments, specifically the uniform time period for both GSOPs and capped payments?
The proposed mitigations may be appropriate provided that the drafting of the regulations is clear and straightforward, and energy suppliers communicate a clear understanding of GSOP entitlement, including when a mitigation or cap applies and when it doesn’t.
It is not in the interests of consumers or suppliers for disproportionate, gamed or unintended compensation to be paid. However, the introduction of mitigations, exemptions and payment caps will inevitably add complexity to the GSOP system. This creates a risk that consumers may be unclear about when they are entitled to compensation and when limitations apply. Given that consumer awareness of GSOPs is already relatively low[xvi], many consumers are unlikely to have a detailed understanding of the circumstances in which mitigations or caps may affect their entitlement. In practice, most consumers will rely on their supplier to explain whether compensation is due and how it has been calculated.
The effectiveness and fairness of the proposed mitigations will depend heavily on clear regulatory drafting and consistent application by suppliers. Ofgem should ensure that suppliers are required to provide accurate, timely and transparent information to affected consumers, including a clear explanation of when a cap or mitigation has been applied and the basis on which this decision has been made.
Therefore, any associated guidance for Outcome Based Regulation must clearly set out suppliers' obligations to accurately communicate compensation entitlements, mitigations and payment limits.
Question 17: Do you have any evidence to inform our assessment of the impact of repeated payments, such as data on existing timescales to rectify these breaches?
2. About us
Consumer Scotland is the statutory body for consumers in Scotland. Established by the Consumer Scotland Act 2020, we are accountable to the Scottish Parliament. The Act defines consumers as individuals and small businesses that purchase, use or receive in Scotland goods or services supplied by a business, profession, not for profit enterprise, or public body.
Our purpose is to improve outcomes for current and future consumers, and our strategic objectives are:
- to enhance understanding and awareness of consumer issues by strengthening the evidence base
- to serve the needs and aspirations of current and future consumers by inspiring and influencing the public, private and third sectors
- to enable the active participation of consumers in a fairer economy by improving access to information and support
Consumer Scotland uses data, research and analysis to inform our work on the key issues facing consumers in Scotland. In conjunction with that evidence base we seek a consumer perspective through the application of the consumer principles of access, choice, safety, information, fairness, representation, sustainability and redress.
Consumer principles
The Consumer Principles are a set of principles developed by consumer organisations in the UK and overseas.
Consumer Scotland uses the Consumer Principles as a framework through which to analyse the evidence on markets and related issues from a consumer perspective.
The Consumer Principles are:
- Access: Can people get the goods or services they need or want?
- Choice: Is there any?
- Safety: Are the goods or services dangerous to health or welfare?
- Information: Is it available, accurate and useful?
- Fairness: Are some or all consumers unfairly discriminated against?
- Representation: Do consumers have a say in how goods or services are provided?
- Redress: If things go wrong, is there a system for making things right?
- Sustainability: Are consumers enabled to make sustainable choices?
We have identified information and fairness as being particularly relevant to the consultation proposal that we are responding to.
3. Endnotes
[ii] Consumer Scotland (2026) The business of being a consumer: Exploring small business consumer experiences and their impact
[iii] Consumer Scotland analysis of Advice Direct Scotland domestic energy casework data (May 2024 to May 2026; n = 21,618 total queries; billing-related queries = 7,477 cases).
[iv] Consumer Scotland analysis of Advice Direct Scotland non-domestic energy casework data, May 2024 to May 2026 (n = 554 total non-domestic queries; billing-related queries = 217)
[v] Consumer Scotland analysis of Advice Direct Scotland domestic energy casework records (May 2024 to May 2026)
[vi] A combination main allocation code “BE20; Billing; Responsibility for paying bill disputed” (15.02%) and “BE20; Billing issue; Disputed bill, customer not responsible” (4.94%)
[vii] Ofgem (2026) Domestic Billing Performance Assessment
[viii] SLC 21B.2
[ix] Consumer Scotland (2026) The Business of Being a Consumer
[x] Consumer Scotland (2026) Ofgem’s Third-Party Intermediaries (TPIs) Market Review
[xi] FCA (2024) Finalised Guidance FG24/1 – Finalised Guidance on Financial Promotions on Social Media
[xiii] Between 2016, when The Electricity and Gas (Standards of Performance) (Suppliers) Regulations 2015 came into force, and 2024, when Ofgem published its statutory consultation on the GSOP payment uplift, CPIH inflation increased by 32.83%. Had GSOP payments been directly indexed to CPIH over this period, their value would have risen to £39.85.