Ofgem’s more important ideas include ringfencing customers’ deposits – it’s time the regulator got a move on
Great news, eh? The energy price cap will rise again in October and then there will be only another three months, rather than six, to wait until the next increase in bills. If that does not seem like an unalloyed benefit, Jonathan Brearley, the chief executive of Ofgem, would like you to remember that energy costs can fall as well as rise. The proposed shortening of the timetable for adjusting the price cap would mean “any price falls would be delivered more quickly to consumers”, he said.
That is true, of course: the cap works off wholesale prices in the preceding period, so a faster recalculation will reduce the lag effect, whatever the direction of the move. This suits the energy regulator’s purposes, one suspects, because its next worry – when wholesale energy prices do eventually fall – is being blamed for delays in lowering bills. Quicker adjustments may marginally reduce the sense that prices go up like a rocket but come down like a feather.
