delete The Electricity (Standards of Performance) (Amendment) Regulations 2023
These are the Electricity (Standards of Performance) (Amendment) Regulations 2023, which amend the 2015 principal regulations governing electricity distributor and connection provider performance standards. Key changes include: replacing the Scottish consumer advocacy body reference with Consumer Scotland; introducing prescribed caps with CPIH indexation for inflation adjustments; simplifying severe weather categories from 3 to 2; removing certain category 3 severe weather exemptions; and updating compensation sums and schedules. The regulations establish mandatory compensation payments to customers when electricity distributors fail to meet prescribed restoration standards following interruptions.
While these regulations purport to protect consumers, they exemplify how mandated compensation regimes distort market signals and create unintended consequences: (1) The bureaucratic apparatus of prescribed caps, sums, and categories adds compliance costs ultimately borne by all consumers through higher electricity bills, not just those who suffer interruptions; (2) Indexation to CPIH locks in the current framework and prevents future adjustment as circumstances change; (3) The three-tier severe weather category system was itself an arbitrary bureaucratic construct that the amendment admits was flawed by simplifying it; (4) Such regulations suppress innovative approaches to service delivery by mandating specific behaviors rather than letting markets discipline poor performance through reputation and competition; (5) The fundamental problem—interrupted electricity supply—is better addressed through tort liability for negligence, competitive market entry, and transparency about distributor performance, not prescriptive government-dictated compensation schedules. The regulations represent the typical regulatory tendency to address symptoms (inadequate restoration speed) rather than root causes (underinvestment, lack of competition) while creating new distortions in the process.