Citizens Advice response to DESNZ consultation on draft load control licence conditions and regulations
Citizens Advice welcomes the opportunity to respond to this consultation. We are supportive of the proposal to introduce a new load control licence. Automation is a key enabler of consumer-led flexibility, and will be key to helping consumers achieve good outcomes without compromising comfort or requiring consumers to manually shift their usage. With affordability issues still front and centre of many consumers’ experiences of the energy market, it is crucial that the technical and regulatory frameworks for consumer-led flexibility help consumers achieve good outcomes - such as lowering their bills - from load control.
With regards to the consumer protection licence conditions proposed in this consultation, we understand that the government has chosen to align with the existing regulatory framework in the retail market. However, it is our view that both the supply licence and the proposed load control licence should be reformed to reflect a more outcomes-focused approach, as undertaken in recent years in the financial services sector. For many people, flexibility services could be a route into driving down bills should they find products and services which suit their needs, and regulation should put outcomes front and centre - with a Consumer Duty which focuses flexibility service providers’ minds on helping consumers achieve good outcomes.
It is also our view that derogations relating to consumer protection licence conditions should not be granted to suppliers. Where licence conditions are similar across both the load control and supply licences, this should ease compliance requirements for suppliers rather than be used as a rationale for derogation.
Finally, we understand that statutory advocacy and advice is not being consulted on at this stage of the consultation process for the load control licence and accompanying regulations. However, it is our view that access to a statutory advice service is a crucial component of an adequate consumer protection framework for flexibility services. Consumers must have access to independent advice on their rights, and statutory advocacy provision can play a unique and significant role in ensuring regulation is responsive to emerging harms or risks to consumers. A landscape with some energy services in and out of scope for advice is likely to lead to poorer outcomes given in some cases there may be a single contract for supply and load control. We look forward to engaging with the government with regards to future consultations.