Ofgem does not know who provides its gas and electricity

Ofgem has admitted that it does not know which energy providers supply its three main offices in London, Cardiff and Glasgow.

That is despite the regulator paying significantly more for its energy than the majority of other publicly-funded bodies, following a 164% annual increase in its electricity costs.

Ofgem made the revelation in response to a Freedom of Information (FOI) request submitted by Utility Week.

Ofgem confirmed that EDF Energy supplies the electricity at its current London office, located in Canary Wharf, but added that it does not hold a record of who supplies gas.

The regulator added that it also does not know who supplies the gas or electricity at its other two main offices in Cardiff and Glasgow.

It explained that as it is a minority tenant at each of its three current offices its energy costs are included in the service charge for each of these buildings.

Ofgem added that in this instance landlords are “not required to tell us who supplies the gas or electricity”.

However, consumer protection laws state that if you are unhappy with your energy prices then you can request your landlord to switch supplier.

A summary of the law published by Citizen’s Advice adds: “You can’t switch energy supplier or tariff yourself if your landlord pays the energy supplier for you. […]

“If you want to switch supplier or tariff, you’ll need to ask your landlord to do it. Find the tariff you want and explain to your landlord why it’s a good deal. Your landlord might agree to switch, but they don’t have to.”

Ofgem’s own advice, published on its website adds that if your landlord is responsible for paying your energy bill then “even then, they should not unreasonably stop you from switching”.

An Ofgem spokesperson added: “As with many government departments and the wider public sector, Ofgem is a minority tenant in three centrally-managed office buildings.

“Energy is purchased centrally for these buildings, which means we are not directly involved in managing or procuring these contracts, however the centralised approach offers significant savings to the public sector.”

Research published last month revealed that both regulators for the energy and water sectors paid more for their electricity last year than the vast majority of other government departments.

Ofwat forked out the most of any department, paying almost 39p/kwh on average, while Ofgem came in third place at 32.4p/kwh.

The figures, published by energy consultancy Box Power CIC, revealed that the energy regulator, which sets the default tariff cap for consumers, paid almost three times as much per kwh for its electricity than the Vehicle Certification Agency which paid just 12p/kwh – the lowest of any government body listed.

In total, Ofgem paid £338,710 for its power between April 2022 and March 2023, an almost 164% increase compared to the previous year when it paid £128,417.

The research prompted calls from the Federation of Small Businesses (FSB) for a review into the relationship businesses have with their landlords to help with energy costs.

Martin McTague, national chair of the FSB, told Utility Week: “Our most recent research shows one in five small businesses have no control over who provides their energy.

“As some of these firms have their energy tariffs tied to their lease, new tariffs negotiated by landlords may result in rent increases. There’s also no obligation for landlords to prove that a rise in rent is due to increased energy costs. Many tenants in this position may never see the negotiated rate during a rent review.

“A comprehensive review of the landlord-tenant relationship is needed to help small businesses cut energy costs and carbon emissions. Action is also needed to address the imbalance of power and information between landlords and their commercial tenants. Banning upwards-only rent reviews would be the right first step.”