Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted
Set out timetable for rebalancing energy costs and implementing electricity market reform proposals.
Recommendation
We remain concerned that even after the crisis has subsided, UK electricity bills are the highest of the countries providing comparable data to the International Energy Agency. The UK had the highest electricity price out of 25 countries reporting both domestic and industrial electricity prices in 2023, (including taxes and levies) and electricity is currently four–times more expensive than gas. Despite repeated promises, the Department has delayed taking action to rebalance energy prices by shifting the cost of environmental levies from electricity to gas. In addition, the Department is reviewing how electricity prices are set for households so that they can benefit from cheaper rates if demand is low or when the weather means more energy is produced. But this review has been running for three years and remains on an uncertain timetable, meaning it is unclear when consumers will start to see the benefits through reductions to their bills. recommendation a. The Department should set out a timetable for policy decisions to reduce electricity bills through its previous commitments to rebalance the costs of electricity and gas. b. The Department should set out a timetable for implementing the proposals for change it has identified from its review of electricity market arrangements. 5
Government Response Summary
The government commits to publishing a decision on the Review of Electricity Market Arrangements (REMA) by mid-2025 and will provide the Committee with a timetable for implementing the proposals for change once decisions are made.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. National Pricing. The Review of Electricity Market Arrangements (REMA) programme has committed to publish a decision by mid-2025, to align with the Contracts for Difference (CfD) Allocation Round 7 auction. Once Ministers have made decisions on market reform and policy design, the programme will progress work to prepare for future legislative requirements. The department will provide the Committee with a timetable for implementing the proposals for change.