For low income or vulnerable groups of people, it can be difficult to find a better energy deal. The Competition and Markets Authority (CMA) estimates that “customers have been paying £1.4 billion a year more than they would” if people found better tariffs, and this has led to some changes in the pricing of energy bills.
The government’s energy regulator, Ofgem, introduced a price cap on energy tariffs in April 2017 for people on prepayment meters. This cap limits how much energy suppliers can increase the price of energy by. In February 2018, under the current government, the price cap was extended to a further million consumers on the Warm Home Discount Scheme.
It’s worth noting that the price cap doesn’t save consumers as much money as the best energy deals on the market would. However, Ofgem have stressed that the price cap aims to prevent customers from being overcharged. It doesn’t aim to get them the best deal.
Ofgem also argued that it didn’t have the authority to enforce caps on energy prices. So on 19 July 2018, the Domestic Gas and Electricity (Tariff Cap) Act was passed, which allows the government to make greater changes in the energy market until conditions are made fairer for consumers.
Ofgem’s price cap was extended to customers receiving the Warm Homes Discount, and legislation has been passed enabling government to intervene more effectively on behalf of consumers, so the government have delivered on their promise and this policy can be marked ‘done’.
Introduce yourself to the details
- CMA publishes final energy market reforms – Gov.uk
- Everything You Need To Know About Prepayment Meters – UK Power
- Ministers welcome protection of 1 million more from high energy prices – Gov.uk
- Warm Home Discount Scheme – Gov.uk
- Energy bills to rise for five million on price cap – BBC News
- Pre-legislative scrutiny of the draft Domestic Gas and Electricity (Tariff Cap) Bill – Parliament.uk
- Domestic Gas and Electricity (Tariff Cap) Act 2018 – Parliament.uk