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Rees-Mogg was accused of having absolute power over the UK energy industry.energy industry

the business secretary Jacob Rhys-Mogghas been accused of starting a “power grab” as a new law proposes to hand over full control of the energy industry to the government.

The government last week introduced an energy price bill to parliament to formalize Energy Price Guarantees, Liz Truss’ flagship policy to cut household costs by capping electricity and gas costs for two years.

However, The Guardian understands that energy suppliers have raised concerns with the business sector that the law contains legislation that can be effectively overturned by the government. off geman independent regulator of the sector.

The bill proposes to give “the power of the Secretary of State to change energy licenses” and “the power of the Secretary of State to give directions.”

Ofgem is responsible for overseeing all aspects of supplier licensing, from ensuring vulnerable customers are treated correctly to the regulations governing smart meters.

If approved in its present form, the law could void Ofgem’s authority. Regulators were hit hard by the energy crisis after efforts to boost competition were undermined as more than 30 suppliers went bankrupt when gas prices soared.

Senators are expected to discuss the bill’s main principles and objectives at the bill’s second reading on Wednesday. Energy companies also complain that they have been given little time to consider the legislation.

Dhara Vyas, Advocacy Director, Energy UK, said:

“While we certainly need swift legislation to enable support for homes and businesses this winter, we have decided to include long-term measures in the bill that could potentially have very significant impacts on the industry. The decision, which needs to be investigated and debated in detail, is unexplainable and we urge the government to reconsider so as not to jeopardize the measures that this bill is supposed to provide.”

A senior source at one major energy supplier accused Rhys-Mogg of a power grab “fit for Henry VIII”. he said:

“This means bypassing Ofgem and the entire licensing and regulatory system without safeguards, time constraints, consultation or appeals processes for suppliers, generators, networks, etc. affected by any decision.”

An executive at another large energy company said: Nationalization through stealth.”

Ofgem declined to comment. Its website states that the Act of Parliament “establishes its duties and authorizes us to accomplish our ends.”

“Governments are responsible for setting policies for the energy sector and proposing changes to this legal framework. We do not dictate sector-wide policy, but if we believe there is a material policy gap affecting consumers, we can point this out. I will.”

The business unit did not respond to a request for comment.

Energy price guarantees and energy rate abatement schemes designed to reduce corporate bills are effectively giving policy makers greater leverage over the business models of UK suppliers.

Rees-Mogg had already angered the energy industry with its surprise announcement. Windfall tax on low-carbon generators last week.

Management fears that the meager details in the proposal will further unnerve investors after six months of the government fizzing and chilling on the idea.

Analysts want to know the level of the cap and how long the tax will be in effect. Oil and gas companies were shocked to discover that windfall taxes on profits could last up to three years when the tax was announced earlier this year.

https://www.theguardian.com/business/2022/oct/16/rees-mogg-accused-of-grabbing-absolute-power-over-uk-energy-industry Rees-Mogg was accused of having absolute power over the UK energy industry.energy industry

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