Following criticism that the twice-yearly adjustment arrangement – in April and October – was a key driver when suppliers began collapsing at the height of the wholesale gas price shock, Ofgem is putting the proposal out to consultation. The cap was credited with protecting families from the worst of the raw energy price increases by preventing businesses from passing on the unprecedented increases to their customers.
Ofgem claimed that its new proposals would provide more flexibility, allowing bills to rise or fall more quickly.
“A more frequent price cap would reflect the most up to date and accurate energy prices, meaning customers would see the benefit much sooner when prices fall from current record highs,” the energy regulator said.
“This change would also help energy suppliers better predict how much energy they need to buy for their customers, reducing the risk of further supplier failures, which would ultimately raise consumer costs.”
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