HOUSEHOLDS could face even steeper energy costs as the price cap, that limits what suppliers can charge bill payers, may be adjusted more often.The changes could affect as many as 15 million people according to the Financial Times.
1The price cap could be adjusted more often so households may have to pay even more in a yearCredit: Getty
Plans that Ofgem has recently published reveal that the regulator would be able to raise (or lower) the cap more often than the current interval of six months.
Households already face a blow of £2,000 in hiked bills by the end of next year, but the news means it could only be going up.
It’s also lead Brits to reach for any number of ways to slash costs, as they ready themselves especially for a cold and expensive winter.
For now, Ofgem has confirmed that we won’t see the cap rise again before the next set deadline of April next year.
But in order to keep control of the energy crisis, there’s nothing to stop a more frequent review of the maximum providers can be charging, beyond that.
Ofgem isn’t planning on making any final decisions on whether changes will happen more often until February next year though, and even then, changes would only be made under “exceptional or unprecedented” circumstances.
Earlier in the year, energy firms were slammed for ramping up household bills by as much as 80% amid rising gas prices and the onslaught of the energy price crisis.
It’s lead to at least 22 companies facing collapse in recent months as they struggled to cope with the rocketing wholesale costs and restrictions placed on them such as the price cap.
The energy price cap offers customers a protected maximum for default tariffs over the space of six months, and is changed usually every April and October.
We saw the last price cap change come into effect at the beginning of last month, but it added as much as £139 a year onto many households’ bills.
Up until then, suppliers had only been able to charge up to £1,138 on their default tariffs between April and September 2021 based on a cap that was announced in February.
The energy regulator announced in August though, that the price cap would rise from October 1 to £1,277, which is the highest since the cap first launched in January 2019.
The overall price is usually based on the price of wholesale energy and costs that companies face in supplying gas and electricity, and with the crisis still very much present, ministers have already warned that the cap could rise again next year,
Ofgem is also thought to be considering changing what makes up how the cap is calculated, though this won’t be confirmed until early next year either.
Energy price cap rise could leave more than five million households in the cold