Great Britain’s energy regulator has opened a consultation on moving the rules that govern electricity balancing and settlement to a licensed code manager. Ofgem published the statutory consultation on 6 November 2026, asking how changes to the Balancing and Settlement Code and related licences should work. For electricity companies that use the code, the proposals concern who would maintain the rules, how amendments would be handled and how existing arrangements would carry over.

Key facts

  • Ofgem is consulting on amendments to the Balancing and Settlement Code and affected electricity and gas licences.
  • The proposals cover how the code is run, how amendments are handled and what role stakeholder advisory forums would play.
  • The consultation closes on 18 December 2026. Formal designation of the code would require action by the Secretary of State on the regulator’s recommendation.

Which rules would move to a licensed manager?

The National Energy System Operator describes three distinct parts of Britain’s electricity market. Suppliers buy power from generators in the wholesale market and sell it to customers in the retail market. The operator uses the Balancing Mechanism to keep electricity supply and demand in balance. The code in Ofgem’s consultation concerns the rules around balancing and settlement within that wider system. The consultation deals with the running and amendment of those rules. It leaves household tariffs outside its scope.

Ofgem proposes changing both the code and the licences that support it. On the code side, it wants views on the manager’s responsibilities, the process for modifying the rules and arrangements for stakeholder advisory forums. On the licensing side, it is consulting on related changes that reach into both electricity and gas licences. Companies already operating under the code can use the transition proposals to see how responsibilities would pass to the licensed manager.

Ofgem and the government are starting with two codes. The Balancing and Settlement Code and the Retail Energy Code are the first intended to move to the framework with licensed managers. The two codes are part of the same reform, but Ofgem is consulting separately on the amendments needed for balancing and settlement.

Who can respond, and who makes the decision?

Ofgem is inviting responses from code administrators, parties to the code, bodies that deliver central systems and consumer groups. Members of the public can also respond. Submissions are due on 18 December, and Ofgem says it will publish responses unless respondents request confidentiality. A market participant can use this stage to raise a problem with a proposed rule change or the transition. Consumer representatives can respond on how the proposed advisory arrangements would give them a say.

Schedule 12 of the Energy Act 2023 requires the regulator to consider submissions before making modifications. If it adopts changes, it must issue a decision notice setting out their effect and start date, how it took account of responses and why any final changes differ from what it proposed.

The power to designate the code sits separately from the regulator’s power to amend it. Section 182 of the Energy Act 2023 provides for the Secretary of State to designate a document by notice, acting on a recommendation from the Gas and Electricity Markets Authority. For participants, the immediate deadline is the close of consultation. The statutory milestone to look for after that process is a designation notice covering the code.