Wednesday 16 February 2022

Ofgem unveils measures to protect customers against rising energy prices

Ofgem has today unveiled a package of short-term measures that aim to future-proof households against skyrocketing energy prices.

According to the new rules, all suppliers will have to offer the same deals to existing and new customers.

The measure will be implemented to ensure customers' access to cheaper tariffs.

It is expected to act as a break on 'unsustainable price competition' and limit suppliers' 'price discrimination'.

The energy regulator said it would monitor the effectiveness of the new measure and would explore whether it should become a permanent one.

Suppliers will also be required to pay a Market Stabilisation Charge which will be paid by suppliers gaining new customers to suppliers losing them. 

This will only be triggered if wholesale prices fall considerably below the level assumed in the price cap from April.

Ofgem said this measure will make sure that energy companies do not take disproportionate financial risks and suppliers who have done the right thing by purchasing energy in advance for their customers are not penalised. 

An Ofgem spokesperson said: “The energy market has faced a huge challenge due to the unprecedented increase in global gas prices; a once in a 30-year event.

"We are putting in place short-term measures to protect customers."