Ofgem disappoints with modest cut to energy price cap

The strength regulator has reduced its price tag cap, preserving some 15 million households £17 a 12 months, but largely maintaining its situation for a different six months.

The the greater part of households will now have their strength expenditures capped at £1,162 per 12 months from April, although those people with pre-payment meters will not have to shell out additional than £1,200 a 12 months.

Launched by Ofgem last 12 months, the cap is supposed to protect customers by providing reasonable strength charges.

Many thanks to a warm winter and an abundance of gas, wholesale charges have plunged to their least expensive place in additional than 12 months, foremost some to speculate that the price tag cap could be slash by up to £60.

Having said that, Ofgem explained that although the price of uncooked elements for strength expenditures had dropped by £38 to £408 in between August and January, those people cost savings had been offset by extra expenses from Govt-imposed renewable obligations on strength suppliers that are passed on to customers. 

Jonathan Brearley, the regulator’s main govt, explained the cap had saved people £1bn on their strength expenditures, but extra that browsing all over for a much better deal could conserve them even additional.

In the latest several years, the strength current market has been flooded with tiny suppliers providing more affordable deals in an try to undercut large players these kinds of as Centrica and EDF. 

As wholesale expenses have fallen, the so-known as Huge Six strength companies have joined this race to the base, slashing the expenses of their tariffs to contend.

Investigation released this week suggested that just beneath a quarter of all the UK’s lowest priced strength suppliers have gone bust in the previous 3 several years, calling in to concern the sustainability of those people companies continue to providing cut price electrical power tariffs. 

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