Ofgem to consult on altering energy price cap

It will open consultations to ensure the cap better represents risks and costs to suppliers

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Ofgem is launching five consultations on adjustments to the energy price cap – to ensure it reflects the costs, risks and uncertainties affecting suppliers.

The five consultations are as follows:

  • Whether the recent volatility of the market has caused the price cap to become far less efficient at a cost level than it is allowed to be.
  • Allowing Ofgem to amend the cap outside its six-month cycle when exceptional circumstances come into play.
  • Working out how much debt-related and material costs the COVID-19 pandemic has really been the trigger for.
  • More reflection of end user categories in the default tariff cap.
  • Looking into the Energy Company Obligation scheme, giving Ofgem the option to allow for the costs of ECO4 scheme.

It will include stakeholder responses in its decisions and intends to have these published by the start of February next year, apart from the consultation relating to COVID-19, which will come out in August 2022.