Our response to: Supporting innovation in the electricity retail market exempting small suppliers from the Universal Service Obligation (USO)

On 16 September 2026, we responded to Ofgem’s consultation on exempting small suppliers from the Universal Service Obligation (USO). Our detailed response is available here.

In our cover letter, we highlight the following key points:

  • We support the exemption and consider 50,000 domestic customers a responsible starting point, but any fixed threshold is necessarily an approximate proxy and should be capable of adjustment in individual cases.
  • The exemption should be considered alongside the Financial Responsibility Principle, Minimum Capital Requirement and wider financial resilience obligations. A supplier should be able to activate a voluntary acquisition safeguard before growth creates a compliance or capital cliff edge.
  • Existing REC and Central Switching Service controls that prevent new registrations when a Market Sanction applies could be adapted for this purpose, with distinct governance so that voluntary use is not treated as a default or compliance failure.
  • Ofgem should quantify the cost of the USO and monitor the cumulative effect of exemptions. Widespread use could concentrate higher-cost and more vulnerable consumers among suppliers that remain subject to the USO, with possible implications for competition and the default tariff cap.

Read our response

Latest Consultations

c2f22302-07da-457c-8b13-e462bc7e3290
Consumer Consent Solution consultation now open
CLOSED: Help shape the future of tariff interoperability: phase 1a consultation now open
Closeup shot hands using laptop computer and internet, typing on
Consultation opens on key Performance Assurance documents for 2026-27
Your Responses To: Consumer Consent Solution Design Consultation

Latest Responses

Our response to: Proposed Code Manager Standard Licence Modifications relating to Data Best Practice
Our response to: Consultation on Data Domain Coordinator role guidance
Our response to: AI assurance in the energy sector
Our response to: Consultation on securing open data in energy

Share this post