Ofgem, the Office of Gas and Electricity Markets, is the independent regulator for the gas and electricity markets in Great Britain. It is governed by the Gas and Electricity Markets Authority and is a non-ministerial government department, so day-to-day decisions are taken independently of ministers. Ofgem does not cover Northern Ireland, which has its own Utility Regulator.
What Ofgem does
- Licensing. Suppliers, network companies and the system operator need an Ofgem licence, and Ofgem can fine or take action against companies that break the rules.
- Protecting consumers. It sets standards for how suppliers treat customers, including billing, debt and support for vulnerable households.
- The energy price cap. Under the Domestic Gas and Electricity (Tariff Cap) Act 2018, Ofgem sets the maximum unit rates and standing charges for default tariffs every three months.
- Running schemes. It administers several government schemes on behalf of the Department for Energy Security and Net Zero, such as the Smart Export Guarantee and the legacy Feed-in Tariff.
Network price controls
Gas and electricity networks are regional monopolies, so Ofgem limits how much they can earn and sets what they must deliver. It does this through multi-year price controls known as RIIO (Revenue = Incentives + Innovation + Outputs).
| Price control | Covers | Period |
|---|---|---|
| RIIO-3 | Electricity transmission, gas transmission, gas distribution | 2026 to 2031 |
| RIIO-ED2 | Electricity distribution | 2023 to 2028 |
| RIIO-ED3 | Electricity distribution | 2028 to 2033 |
Ofgem published its RIIO-3 final determinations in December 2025.
Why it matters
Network costs make up part of every household bill, so Ofgem’s decisions on network investment feed directly into what consumers pay, as well as into how quickly the grid can be expanded for new renewable generation.
Read more: Energy bills this winter: a 4% cap rise, VAT off electricity, and a forecast 16% jump in January.