Energy regulator proposes quarterly price cap review to pass on savings and protect suppliers from being damaged
The price cap on household energy bills could be reviewed everythreemonthsundernew plans mooted by Ofgem yesterday.
The energy regulator said that it might insert two new reviews a year, one in January and another in July.
It would help pass on savings from a potential fall in gas prices to customers more rapidly, Ofgem said, and also protect under-pressure energy suppliers from being damaged by the cap.
The regulator is also consulting on plans that could add between £40 and £80 to customers' bills from this October.
Around 23 million householdsingreatbritainhavetheir energy prices decided by the energy price cap, so any change will have a huge impact on wallets across the country.
"Today's proposed change would mean the price cap is more reflective of current market prices and any price falls would be delivered more quickly to consumers," said Ofgem chief executive Jonathan Brearley.
"Itwouldalsohelpenergysup
pliers better predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures, which ultimately pushes up costs for consumers. The last year has shown that we need to make changes to the price cap so that suppliers are better able to manage risks in these unprecedented market conditions."
But the changes were heavily criticised by Money Saving Expert's Martin Lewis, who saidhisinputhadbeenignored.
"Item after item of the changes that were being made were just absolutely kowtowing to the lobbying of the industry, and every mitigating factor I and other consumer campaign groupshadputinhadbeensimply ignored," he told LBC.
He said that moving the price cap every three months would protect the industry.
He also criticised separate plans that would force an energy supplier that takes customers away from another supplier to pay a fee to their rival if wholesale energy prices dropped by more than 10 per cent.
"This was to prevent consumers from the effects of harmful competition, and by harmful competition they mean cheaper prices. To prevent consumers from suffering from the ill effects of having cheaper prices," he said.