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Rees-Mogg is accused of taking absolute power over the UK energy industry Energy industry

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Business Secretary, Jacob Rees-Mogghas been accused of initiating a “power grab” as new legislation proposes to hand full control of the energy industry to the government.

Last week, the Government introduced the Energy Prices Bill to Parliament to formalize the Energy Price Guarantee, the Liz Truss’ flagship policy to reduce household bills by capping the cost of electricity and gas for two years.

However, the Guardian understands that energy suppliers have raised concerns with the Business Department that the legislation contains proposals that the government could effectively reverse Ohemthe sector’s independent regulator.

The Bill proposes to transfer the “powers of the Secretary of State to make changes to energy licences” as well as the “powers of the Secretary of State to give directions”.

Ofgem is responsible for overseeing every element of a supplier’s licence, from ensuring that vulnerable customers are treated correctly to the rules governing smart meters.

If approved in its current form, the legislation could remove Ofgem’s powers. The regulator has been hit by the energy crisis after its efforts to boost competition were undermined as more than 30 suppliers went bankrupt due to rapidly rising gas prices.

The Lords are expected to discuss the main principles and purpose of the bill in a second reading on Wednesday. Energy workers are also unhappy that they were given little time to study the legislation.

Dhara Vyas, Director of Advocacy at Energy UK, said: “It is amazing that the Government has given the energy industry just 24 hours to respond to a bill that unexpectedly proposes to give ministers sweeping and seemingly unlimited new powers to regulate the industry.

“While we certainly need swift legislation to provide support for households and businesses this winter, the decision to include longer-term measures in the Bill with very significant potential implications for the industry – which therefore need to be scrutinized and carefully debated – is inexplicable. We call on the government to reconsider so that they do not risk the measures that this bill is supposed to provide.”

A senior source at one of the major energy suppliers accused Rees-Mogg of a power grab “worthy of Henry VIII”. He said: “It gives the Secretary of State absolute power over all regulations governing all aspects of the UK energy industry, forever.”

“This means bypassing Ofgem and the entire licensing and regulatory regime with no guarantees or time limits and no consultation or appeals process for anyone – supplier, generator, networks – affected by any decision.”

The head of another major energy company said: “This power grab means the government can control the grid, management, pricing, ability to purchase assets and infrastructure. This is secret nationalization.”

Ofgem declined to comment. Its website says the parliamentary charter sets out its “responsibilities and gives us the powers to achieve our aims”.

“The government is responsible for defining energy policies and proposals for changing this legislative framework. We have a clear role to play in supporting policy issues such as decarbonisation, and we need to act within that framework. We do not manage general policy in the sector. However, if we believe there are important gaps in policy that affect consumers, we may call it out,” it said.

The business department did not respond to requests for comment.

The Energy Price Guarantee and the Energy Bill Relief scheme, designed to lower bills for businesses, have effectively given politicians significant influence over the business models of UK suppliers.

Rees-Mogg has already angered the energy industry by suddenly announcing a windfall tax on low-carbon electricity generators last week.

Executives are concerned that the scant details included in the proposals will further scare off investors after six months in which the government strongly opposed the idea.

Analysts want to find out the level of the restriction and how long the fee will be in effect. Oil and gas companies were shocked to discover the windfall tax on their profits could last for up to three years when the levy was announced earlier this year.

https://www.theguardian.com/business/2022/oct/16/rees-mogg-accused-of-grabbing-absolute-power-over-uk-energy-industry

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