Response to Ofgem on reselling gas and electricity: maximum resale price direction

Consumer Scotland welcomes the opportunity to contribute to Ofgem’s call for input on the resale of gas and electricity and the review of the Maximum Resale Price (MRP) arrangements. The last review was undertaken in 2001 and given the significant changes in energy markets and the energy system that have taken place in the intervening period it is only right the arrangements are re-evaluated and updated to reflect these shifts and the evolving priorities and needs of energy consumers.

As the statutory and independent body for consumers in Scotland we are specifically concerned with ensuring that any new guidance serves and protects Scottish households and small-and micro-business: reducing consumer harm, increasing consumer confidence, promoting sustainable consumption and advancing inclusion, prosperity and wellbeing.

In reviewing and refreshing this guidance we would like to see:

• Sustained efforts to better understand the numbers, locations and types of resellers and consumers of resold energy.
• A clear articulation of the responsibilities and requirements of resellers in their role as an intermediary between end-use consumers and suppliers.
• Strengthened enforceability and accountability around MRP guidance that makes it easier for consumers to seek redress and resolution when things go wrong.
• Consideration of bringing small and micro-businesses into scope of the MRP rules.
• Further engagement with different stakeholders to identify barriers and solutions to improving smart meter coverage across resellers and consumers of resold gas and electricity that can support flexible and sustainable energy use.

Question 1. What should be the purpose and objective(s) of the MRP? What risks should it protect resale consumers from?

Purpose

The purpose of the MRP arrangements is to provide clear, simple and enforceable rules and guidance for resellers and consumers of resold energy that primarily protect consumer interests and incentivise behaviours that contribute to the achievement of wider policy objectives around net zero, clean flexibility and economic growth.

Objectives

The overall purpose should be underpinned by the following four objectives:

• Ensuring a fair and affordable price for all consumers of resold energy.
• Establishing clear and accessible routes to help for consumers of resold energy.
• Enabling suitably strong mechanisms of enforcement and accountability.
• Putting in place the right market signals and extending access to market innovations that can drive more sustainable behaviours.

Risks

It is important that refreshed MRP guidance acts to protect domestic and small and microbusiness consumers of resold energy from the following risks:

• A lack of evidence-informed policy decision-making because of knowledge gaps around the number, type and location of resellers and consumers of resold energy in the UK.
• Increased likelihood of falling into debt and experiencing negative impacts on their lives and livelihoods because of paying too much for gas and/or electricity.
• Negative impacts on the health and wellbeing of domestic end-users of resold energy due to them being unable to access additional support such as the Priority Services Register.
• Continued bad practice on the part of resellers and unreasonable costs to consumers of resold energy due to unclear and/or onerous routes to redress and ineffective enforcement mechanisms.
• Households and small businesses being left behind in the push towards clean flexibility due to limited access to innovations in the market that can help lower bills and reduce or flex demand.

Question 2. What approach(es) should we use to set the MRP and deliver “fair prices”?

The current arrangements make it very difficult for the purchaser of the resold energy to understand whether they are getting a good deal or not. They need to understand the terms and conditions of the tariff the reseller has signed up to, and their proportionate contribution to the energy consumed under the contract. This information may be difficult to obtain and understand, and even if the consumer identifies that they are being overcharged their routes to rectify this are not easy. This is particularly problematic at a time of high energy prices.

Households continue to struggle with cost-of-living pressures, persistently high energy prices and record levels of debt. Consumer Scotland’s research found that the proportion of respondents to our energy affordability tracker survey in energy debt has increased to 15% (equivalent to 383,000 households in Scotland). This is a statistically significant rise from 9% the same time the previous year.[1] Levels of fuel poverty amongst groups of domestic end-users potentially being resold energy such as those in social housing or private rented accommodation are also significant. According to the Scottish House Condition Survey 2023, 61% of households in the social rented sector and 25% of households in the private rented sector are living in fuel poverty.[2]

Small- and micro-businesses are also struggling with energy costs. Recent research from the Federation of Small Businesses (FSB) has seen a significant drop in small business confidence, particularly in Scotland, with Scottish small businesses experiencing increased running costs, and utility costs cited as one of the biggest drivers.[3] Importantly, FSB research also finds that 45% of small businesses in the UK do not choose their own supplier.[4] Findings from Consumer Scotland’s own research in this area highlights the broader challenges small businesses consumers face in securing fair and reasonable prices for their energy. The research found that energy was the only market where a majority of small businesses did not agree that they pay a fair and reasonable price for products. Furthermore, the research found that just under one third of small businesses active in the energy market agreed that terms and conditions were unfair, with this figure lower in other markets.[5] While Consumer Scotland’s research looked at the issues being faced by those business consumers purchasing energy directly from a supplier rather than being resold energy, it speaks to a broader set of issues linked to small businesses’ ability to negotiate energy deals. This is also borne out in Ofgem’s own 2024 non-domestic research, which found that medium-sized businesses were more likely to have switched supplier in the last year, compared to small businesses and sole traders and micro businesses.[6] In essence, there is a body of evidence indicating that it cannot necessarily be assumed that small and micro-businesses have the capacity to negotiate and secure affordable deals as the original MRP guidance did and hence why they were originally excluded from its scope. At the very least, further evidence gathering is required, with a specific focus on the experiences of small and micro-businesses being resold energy, to inform any new arrangements.

Overall and against this backdrop, it is essential that regulation supports access to fair and affordable energy. MRP guidance has an important role to play in ensuring this for those consumers who do not have a direct relationship with a supplier because of where they live or do business and that requires them to purchase their energy from a reseller such as a landlord or a park home site owner.

With this in mind, we believe that Ofgem should consider the following in setting new MRP guidance to achieve fairer prices:

• The current cost pass-through approach where the resale price is based on the price that the reseller pays linked to a contract over which the purchaser has little influence creates unfairness in the system based on where people live and/or do business and has the potential to exacerbate affordability and debt issues. The onus should be on the reseller to find the best deal for end-use consumers including finding a way to get domestic-end use consumers onto domestic contracts and increasing all consumers visibility with suppliers.
• Linked to the above, Ofgem should undertake further work with consumer bodies, advice bodies, suppliers and resellers to identify ways in which harm and detriment, particularly for those domestic end-users who are vulnerable and/or have high energy needs, could be reduced by ensuing fair access to support such as the Priority Services Register. Establishing a reseller register (as suggested in response to Q19.) could be one way in which to increase the visibility of both resellers and end-users.
• Further evidence gathering to understand the impact of bringing small and micro-businesses into scope of the MRP guidance and which method of calculating the MRP for these consumers (acknowledging that it might be different to the approach applied to domestic end-users) would be most appropriate.
• In partnership with DESNZ, and building on work started in 2023[7], Ofgem should drive forward work on developing a more detailed understanding of the number, location and type of households and small business and micro-business being resold energy, on non-domestic contracts and/or or without a direct relationship with their supplier. This could support more evidence-based and targeted policies.

3. Do you believe that some or all non-domestic end consumers should be protected by the MRP? Please provide reasons for your answer.

As highlighted in the response to question 2, Consumer Scotland believes there is a body of evidence that suggests that the assumption that underpinned the original MRP guidance around small-businesses ability to negotiate energy deals requires review. By protecting non-domestic end consumers through the MRP, Ofgem could support small businesses to secure more favourable rates, bring down costs to their businesses and ultimately flourish and contribute to the economy. This could potentially align with Ofgem’s growth duty. However more work is required to assess the impacts of bringing small and micro-businesses into scope of MRP guidance. In particular, and as Ofgem to some extent has already identified in its call for input, around:

• Whether MRP guidance should include all small and micro-business consumers or just a sub-set, e.g., the smallest businesses which could struggle most to negotiate and secure fair energy deals.
• The necessity and feasibility of defining different MRP calculation approaches for domestic and non-domestic end use consumers.
• The total number of consumers (domestic and non-domestic end users) who the MRP guidance applies to.

4. Do you think there is currently the risk of poor outcomes for non-domestic consumers because the MRP does not apply? If so, why?

As highlighted in the response to Questions 2 and 3, there is evidence to suggest that (1) small and micro-businesses are struggling with their energy bills and (2) to secure fair and affordable deals. In cases where they are resold energy, small and micro-businesses will be subject to reseller decisions on energy contracts and rates and may not have the capabilities and/or capacity to influence these decisions. In turn leaving them with potentially uncompetitive and unaffordable bills and negative consequences for their businesses. 

In similar ways to domestic consumers, non-domestic consumers without a direct relationship with their supplier can also find it difficult to access additional support with affordability, debt and disconnection issues as well as energy efficiency and the uptake of low carbon technologies. The latter being critical to meeting Scottish and UK carbon budget and net zero targets, as well as reducing energy demand and bills for these businesses. An FSB published in 2025 highlighted that just 26% of small businesses feel they have the appropriate knowledge to transition to net zero, and 14% believing they have the necessary time.[8] While in itself the MRP guidance cannot resolve all of these issues, it can make an important step to help with improving affordability of energy for small and micro-businesses and putting in place incentives that drive ‘reseller’ investment in low carbon technologies and infrastructure.

Finally, when things go wrong, redress options can be limited as non-domestic consumers resold energy do not enjoy the extended protections that were granted to small- and micro-businesses consumers experiencing issues with their supplier, broker, network operator, green deal or heat network supplier in 2024.[9]

5. Are you aware of barriers to resellers offering flexible tariffs (e.g., time or type of use tariffs) to domestic and non-domestic tenants?

A key barrier to domestic and non-domestic end users access to flexible tariffs are critically linked to the smart meter rollout, and specifically the fact that the reseller will be responsible for liaising with the supplier and giving permission to enable installations. Potential barriers to resellers enabling smart meter installation could include time, awareness and associated costs, with technical barriers linked to meter locations, connectivity and sub-metering also presenting issues. This suggests there is a need for UK government, Ofgem, suppliers, the Smart Energy Code (SEC), Smart Energy GB and others to work to ensure these barriers are overcome and regulation such as the Smart Energy Code updated accordingly. Moreover, work needs to be undertaken to support resellers to provide transparent and standardised billing that reflects time-of-use-tariffs and is accessible and interpretable by consumers.

6. Does the current MRP strike the right balance between capping prices and facilitating investment to deliver net zero and lower energy bills? Please explain your answer and provide evidence where possible.

7. What changes should we make to the MRP to facilitate investment? Please explain your answer and provide evidence where possible.

Efforts to strike the right balance between capping prices and facilitating net zero investment need to be underpinned by better data on resellers and consumers resold energy. This could help develop understanding of what the needs of these consumers and resellers are, and what access they may already have to existing initiatives and support at local and national levels and provided by suppliers as well as governments. Consumer Scotland is undertaking research in 2026 that could potentially contribute to strengthening this evidence base and we would be happy to discuss further.

The capping of prices and recovery of costs is only one mechanism through which to incentivise investment and consideration needs to be given to how MRP guidance interacts with other policy mechanisms and processes such as the smart meter rollout and energy efficiency and low carbon technologies financial support initiatives (publicly and privately funded). Understandably, small business ‘resellers’ could struggle to meet the upfront costs of such investment and access to grants and loans is essential. Equally, allowing resellers to pass on infrastructure costs to consumers, especially those who are least able to pay, could be problematic, even if profit-making is prohibited. Furthermore, consumers, not just resellers, are drivers of energy efficiency and low carbon technology uptake improvements. Yet, resellers, such as landlords or mobile home site owners, can pose barriers to consumers implementing these improvements. Overcoming these barriers has proved challenging, and there is scope for Ofgem to convene further discussions bringing together tenants, residents, landlords, suppliers, local and national government, consumer bodies and others to understand how they could be addressed and how MRP interacts with other guidance, legal requirements and market design to incentivise larger-scale private investment in this regard.

8. What evidence is there of domestic households in shared and multiple occupancy settings with dedicated EV infrastructure (namely tenants and leaseholders) being overcharged as a result of the resale of electricity?

9. What evidence is there of non-domestic EV users experiencing harm due to the resale prices being charged in private business tenancy settings?

10. Do you have evidence of the impact of Ofgem’s 2014 decision to disapply the MRP on EV infrastructure investment and roll-out? If Ofgem introduced MRP protections for dedicated EV infrastructure in domestic resale settings, what impact would this have on landlords’ ability to invest and future charge point rollout?

Consumer Scotland research[10] on the experience of EV drivers in Scotland, carried out in early 2024, clearly identified a range of concerns with the public charging network. Both absolute price levels and variations in price level between different charge point operators were highlighted. Further, in common with our wider, cross-market consumer research[11], we found consumer attitudes to be strongly linked to cost and convenience overall, and that was reflected in the concentration of EV ownership among those able to charge at home.

That research did not identify any of the issues described in this current consultation, however. While we did not ask specifically about these issues, EV drivers taking part in our online survey and in focus groups were given the opportunity to raise issues not directly addressed by the questions we included, and none raised the concerns described.

More widely, both our own and other research has identified barriers for those not able to charge privately at home, with public charging typically both more expensive and less convenient. We therefore welcome Ofgem’s consideration of these issues, as it is clear that a menu of different technical charging solutions will be needed to meet the needs of those consumers, depending on their housing and wider circumstances. For drivers using charging facilities in underground parking in modern flats, for example, it is appropriate and useful to consider this issue.

The challenge relates to the quantification of genuine additional costs. There are – obviously – capital, maintenance and administrative costs associated with any commercial charge point, which are recovered through the charging rate. Costs are clearly much more limited and easier to compare if what is provided is simply access to a standard 3 pin socket, but the associated charging speeds would be very slow in that circumstance.

17. Does the MRP strike the right balance between empowering the end consumer to exercise their right to transparency versus not placing an undue burden on the reseller? How do you think we could improve transparency?

There is more work to be done to empower end consumers to exercise their right to transparency, and to ensure resellers are aware of the responsibilities and duties placed upon them in this regard. This is vital given that consumers resold energy do not enjoy the same consumer protections around metering, billing and payments as those with a direct relationship with their energy supplier who are required to comply with standard licence conditions. With the market-wide half-hourly settlement introduced and time-of-use tariffs increasingly popular, ensuring transparency is ever more important and potentially more complex.

Evidence, for example, from park homes suggests that the right balance is currently not being struck. Residents, though associations like the Scottish Confederation of Park Home Residents Association (SCOPHRA), have raised issues around a complete absence of billing, a lack of transparency and documentary evidence around how bills are calculated and overcharging.

We would also highlight services commonly referred to as “bill-splitters” as warranting specific scrutiny. At least some of these services offer fixed bills – where the price the end user pays doesn’t vary regardless of how much they use. The energy charges of these services are not commonly available, but it is unlikely that the cost to consumers correlates very closely with the underlying tariff rates, as doing so would expose the reseller to significant volume risk. It is unclear how such an offering can be compliant with MRP requirements.

To improve transparency, the language in new MRP guidance could be made less ambiguous and given that they act as intermediaries between end-users and suppliers framed in terms of the responsibilities of resellers in this regard.

Furthermore, Ofgem should work with suppliers, SEC, Smart Energy GB, distribution network operators, resellers and groups such as park home resident associations to identify the technical and other barriers to the rollout of smart metering and sub-metering which could help improve transparency. Ofgem could also work with suppliers and distribution network operators to assess cases where it might be possible and more efficient for some end-users to be directly sold their energy by a supplier.

Ultimately, as set out in our response to Questions 18 and 19, stronger deterrents and penalties also need to be put in place to improve reseller compliance with the rules.

18. Do you believe the current penalties for breaching the reselling rules are an adequate deterrent?

For those resold energy, when things go wrong, routes to redress and resolution are limited, onerous and costly.

The following statement in current MRP guidance encapsulates the existing shortcomings:

“Anyone who charges more than the maximum resale price may face civil proceedings for the recovery of the amount overcharged and may be required to pay interest on the amount overcharged.”

The deterrents in the current guidance are not sufficient or easily enforceable. The burden remains on consumers to:

• Challenge resellers, which can be difficult when a landlord is not easily contactable or exhibits threatening behaviour.
• Calculate the money they can potentially withhold in cases of suspected overcharging, which relies on consumers being aware of MRP guidance and given sufficient information by the reseller in the first place to identify that there is an issue.
• Take the case to a first-tier tribunal when they cannot resolve the problem themselves and having the time and money to do this.

Evidence from, for example, the park home sector would suggest that these deterrents and routes to redress are not adequate. Park home site owners continue to conceal hidden charges within utility bills and refuse to provide clarity on billing methodologies. SCOPHRA has also highlighted the case of one site which has received no bills for more than two years.[12]

19. Do you have any suggestions on measures that could be taken to improve enforcement and accountability?

To strengthen enforcement and accountability, Consumer Scotland suggests consideration of the following:

• Ensuring new MRP guidance articulates a set of reseller responsibilities and requirements that can guide their interactions with end-use consumers for whom they act as an intermediary with suppliers.
• Establishing a register of resellers (who are excluded from TPI regulation scope) which could increase visibility of both resellers and those that they resell energy to, including vulnerable end-users.
• Issuing of a direction from Ofgem to resellers requiring them to make tariff and consumption information available to end users at regular and/or appropriate intervals (e.g., in the case of a pricing change), with the information presented so that consumers can easily understand the basis on which their charges have been calculated.
• Due to the significant levels of harm and detriment that consumers resold energy are exposed to, consideration to be given by UK Government of granting Ofgem MRP enforcement powers and putting MRP in scope of the Energy Ombudsman. It would make sense for Ofgem and the Energy Ombudsman to have a role in enforcement and redress around these matters, either solely or in partnership with other bodies such as the Private Rented Sector Landlord Ombudsman or another housing ombudsman. Ultimately this means requiring resellers to be a party to such proceedings, which may need legislative change.

20. Is there anything else we should be considering with respect to the MRP?

Consumer Scotland would welcome the opportunity to continue to engage with Ofgem around the design and implementation of new MRP arrangements to help ensure they adequately protect consumers and contribute to the UK’s wider net zero ambitions.

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?

Our response has been framed by our Consumer Principles. Reviewing policy against these principles enables the development of more consumer-focused policy and practice, and ultimately the delivery of better consumer outcomes.