THE ENERGY price cap, which limits just how much energy firms can charge customers, could be changed every three months under new plans.
The cap is typically updated every six months but that time could be halved under new plans announced by Ofgem today.
1
It means more frequent updates to the maximum energy suppliers can pass on to their customers on a variable dual-fuel rate.
But the regulator says that the move could help reflect the most up to date and accurate wholesale prices – helping customers battle rising costs.
That’s because, should prices fall from their current record highs, bill-payers would see the benefit much sooner, rather than waiting MONTHS for costs to drop again.
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.
“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.”
Ofgem says the change could take place from October this year.
Nothing has been confirmed yet, but discussions over the move are due to take place until mid June.
Not only might the price cap update help struggling customers, but suppliers would be able to better predict how much energy they need to purchase in the first place.
Most read in Money
That will hopefully reduce the risk of further supplier failures, which ultimately pushes up costs for consumers.
Over 30 firms have folded in the past year.
The price cap was originally set up in January 2019 by Ofgem, in an effort to limit how much providers can charge on default energy bills to spare Brits from being unfairly charged.
What does it mean for energy bills this year?
Forecasts from Cornwall Insight suggest that the cap could reach £2595.19 come the winter time this year.
That means bills will go up ANOTHER £600 for most households.
After the last price cap refresh, energy bills hit an all time high.
They rocketed by 54% when they went up from £1,277 on average to £1,971, all thanks to the latest price cap rise.
But the analytics experts predict that by the summer next year, the cap could come DOWN to £2292.40.
More to follow…
or the latest news on this story keep checking back at Sun Online.
Thesun.co.uk is your go to destination for the best celebrity news, football news, real-life stories, jaw-dropping pictures and must-see video.
Download our fantastic, new and improved free App for the best ever Sun Online experience. For iPhone click here, for Android click here.
Like us on Facebook at www.facebook.com/thesun and follow us from our main Twitter account at @TheSun.
This post first appeared on thesun.co.uk
