Cost of living
Ofgem proposes quarterly price cap review
Energy regulator Ofgem is considering a quarterly review of the price cap rather than every six months to help households cope with the cost of living.
It said it wants to make the market “fairer and more resilient” and that amore frequent price cap would reflect the most up to date and accurate energy prices.
When prices fall from the current record highs, customers would see the benefit much sooner.
The proposed change would also help energy suppliers more accurately predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures which ultimately push up costs for consumers.
Jonathan Brearley, CEO of Ofgem, said: “Our top priority is to protect consumers by ensuring a fair and resilient energy market that works for everyone. Our retail reforms will ensure that consumers are paying a fair price for their energy while ensuring resilience across the sector.
“Today’s proposed change would mean the price cap is more reflective of current market prices and any price falls would be delivered more quickly to consumers.
“It would also help energy suppliers better predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures, which ultimately pushes up costs for consumers.
“The last year has shown that we need to make changes to the price cap so that suppliers are better able to manage risks in these unprecedented market conditions.”