Household energy bills could be reviewed twice as often, instead of the current six, under the energy regulator’s new plans to review the price cap every four months
energy bills will rise and fall much faster under new rules created by the Ofgem energy regulator.
The rules stipulate that billing limits will be reviewed four times a year, instead of the previous two.
Ofgem checks his price capwhich limits how much consumers pay for energy.
The price cap works by capping how much the average household pays for electricity each year when paying by direct debit on a variable-rate tariff.
The price cap is currently reviewed every six months.
Ofgem now advises on this every four months.
A statement from Ofgem said: “A more frequent price cap would reflect the most up-to-date and accurate energy prices and mean customers would see the benefit much sooner if prices fall from current record highs.
“This change would also help utilities more accurately predict how much energy to buy for their customers and reduce the risk of further supplier failures, ultimately driving up costs to consumers.”
Jonathan Brearley, Chief Executive of Ofgem said: “Our top priority is protecting consumers by ensuring a fair and resilient energy market that works for all.
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“Today’s proposed change would mean that the price cap would better reflect current market prices and any price reductions would be passed through to consumers more quickly. It would also help energy suppliers better predict how much energy to buy for their customers and reduce the risk of further supplier failures, ultimately driving up costs to consumers.
“The last year has shown that we need to make changes to the price cap to enable suppliers to better manage risks in these unprecedented market conditions.”
Ofgem is currently reviewing the price cap in April and October.
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The regulator increased this cap from £1,277 to £1,971 in its April 2022 review.
What is Ofgem’s energy price cap?
Despite what the name might suggest, the price cap is not a limit on how much you pay for energy.
Instead, it sets a limit on the rates a supplier can charge for each unit of gas and electricity you use, and is reviewed twice a year.
The price cap changes every six months in April and October.
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Launched in 2019, it is based on a number of factors including wholesale electricity costs over the past six months.
Get help with your energy bill
British Gas has an Energy Trust fund which is accessible to everyone, not just British Gas customers, provided they meet the eligibility criteria.
You can also get help from the following energy suppliers if you are already a customer: