Consumer-funded energy policies, House of Commons Committee of Public Accounts

House of Commons Committee of Public Accounts has published “Consumer-funded energy policies” report.

Key recommendations:

- The Department for Business, Energy and Industrial Strategy (BEIS) significantly underestimated the costs of the three Framework schemes. BEIS did not do enough to ensure its forecasts were based on the best available evidence. BEIS must ensure it has access to the right expertise and intelligence to ensure its forecasts are based on the best available evidence. It should review its market intelligence capability regularly to ensure it is doing enough to mitigate the risk of further forecasting failures.

- BEIS had not prepared properly for the possibility that its forecasts were wrong, and as a result, had to take quick corrective action that may have undermined investor confidence unnecessarily. BEIS and HM Treasury should assess the uncertainty surrounding forecasts of energy schemes, and put in place proportionate backup plans for controlling scheme costs and outcomes in the event that central forecasts prove incorrect.

- BEIS should report much more openly and regularly on the Framework and also publish a consumer prices and bills report annually in an easily understandable format so that consumers can see clearly what they are paying. The next edition should be published before April 2017. It should also publish a clear account of the assumptions underpinning Framework forecasts each time those forecasts are published.