Energy price cap to come into force on January 1
6th November 2018 | Residential Energy
Britain’s energy price cap to protect 11 million households on rip-off gas and electricity tariffs will come into force on January 1, saving consumers up to £120 each. But regulator Ofgem revealed the cap is likely to be increased next April due to soaring wholesale energy costs. The cap will collectively save customers around £1 billion by limiting the amount providers can charge for poor-value standard variable tariffs.
Ofgem said the cap was to be initially set at £1,137 per year for a typical duel fuel customer paying by direct debit. It will save households around £76 per year on average, with those on the most expensive tariffs savings £120. But Ofgem added it is likely to announce just a month later that the cap will be increased, to take effect in April, after wholesale energy costs have risen “significantly” over the past year and continue at the same pace.
Energy price cap
The cap is set to be updated in April and October every year to reflect the latest estimated costs of supplying electricity and gas, including wholesale energy costs. The price cap will ensure that, whether energy costs rise or fall, suppliers are not feathering their nest.
Ofgem chief executive Dermot Nolan said, “From January 1, the energy price cap will put an end to customers on default tariffs being overcharged as mush as £1 billion for their gas and electricity. The price cap will ensure that, whether energy costs rise or fall, suppliers are not feathering their nest and changes in energy prices will reflect the underlying costs to heat and light our homes.”
He added, “Consumers who want to cut their bills further should shop around for a better energy deal and, while the cap is in place, we will continue our work to make this as easy as possible.”
More information available on the website below