Price Cap Could Help 11 Million Households Save on Energy Bills
September 6, 2018
Ofgem, the UK’s energy industry regulator, has revealed plans that it says should result in notable savings for as many as 11 million households around the country.
The regulator has put forward proposals for a price cap that would limit the amounts of money allowed to be charged by energy suppliers to consumers on poor value gas and electricity tariffs.
According to Ofgem’s own figures, the price cap would result in an average of £75 worth of savings among the 11 million households expected to benefit, with people on the most expensive tariffs potentially in line for savings worth £120 a year.
The good news for consumers is that Ofgem now has the powers to introduce its own proposals once it’s decided what’s in the interest of fairness within the energy industry.
As a result, expectations are that the regulator will be able to go ahead with its plans for a price cap and have the relevant rules implemented nationwide before the end of this year.
“Ofgem has made full use of the powers Parliament has given us to propose a tough price cap which will give a fairer deal to consumers on poor value default tariffs,” said Dermot Nolan, Ofgem’s chief executive.
“Once the price cap is in place, all households in Great Britain covered by the cap will be protected from being overcharged for their energy.
“Consumers can have confidence that falls in energy costs will be passed on to them and if costs increase, Ofgem will ensure that any rise will be due to genuine increases in energy costs rather than supplier profiteering.”
Exactly how much money any individual consumer or household might save as a result of the energy price cap depends on the tariff they’re on and the extent to which they’ve been getting overcharged by their suppliers.
Ofgem has said that it hopes its price cap will eventually not be necessary because it wants to make the gas and electricity markets generally more competitive and fairer to consumers via a variety of regulatory measures to be introduced over the next five years.
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