The energy industry regulator is set to take “bold action” to change the price cap to save millions of homes from rising bills as suppliers face a deepening energy crisis this winter.
In an open letter to the industry, Offgame promised to open a consultancy How Energy Value Cap Is Calculated Next month as soon as possible to make sure it allows suppliers to recover their costs.
The regulator has not suggested any specific changes in the letter, but expects the industry to take the opportunity to call for a price cap, which changes only twice a year, To be more sensitive to market swings By changing as many times as once every quarter.
“These are challenging times that call for bold action,” said Chief Executive Officer Jonathan Brearley. offgame, wrote.
This will be the first major change in the price cap, which was Introduced in early 2019 To protect households from unreasonable energy bills through ceilings based on the cost of purchase and supply of gas and electricity.
The energy crisis, which has led to record market prices around the world, has pushed these costs ahead of price cap updates, triggered the collapse of 13 energy suppliers in the past seven weeks, and many more to follow this winter. are expecting.
Along with Offgame’s plan to change the price cap, it will also begin to “raise the bar” on its standards for energy supplier finance to ensure that they offer “a sustainable business model” that reduces risk to consumers. does less.
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Offgame also plans to outline its expectations for how suppliers should help families who are struggling to pay their bills by offering debt payment plans or other financial assistance “to their most vulnerable consumers”. Huh.
Brearley said that “the unprecedented and unexpected rise in gas and electricity prices in recent months has put energy markets under severe stress”.
He added: “As this period of uncertainty continues, and pressure on the sector mounts, we are taking steps to protect the short-term and long-term interests of consumers, provide greater certainty for investors and strengthen the sector’s resilience.” We do.”
The regulator plans to consult on the changes in November and expects to make its changes as early as February before forecasting the next energy price hike for April. 15 million households faced the sharpest bill increase on record this month after Ofgem removed a cap of about 12.5 percent on the standard tariff.