UK Regulator Confirms Energy Bills Cap Will Be Updated Quarterly
04 August 2022 - 6:57PM
Dow Jones News
By Jaime Llinares Taboada
U.K. energy regulator Ofgem on Thursday confirmed that the
energy price cap will be updated quarterly going forward, rather
than every six months.
The change is intended to reduce the dislocation between
wholesale and retail energy prices in Britain, which last year
contributed to a large number of suppliers going bankrupt. The
price cap reflects the actual cost of supplying energy to
households, and caps the level of profits for retail firms at
1.9%.
Ofgem said that moving to quarterly updates will reduce the risk
of further large-scale supplier failures, which cause huge
disruption and increase costs for consumers. "It isn't in anyone's
interests for more suppliers to fail and exit the market," it
said.
Ofgem warned that customers face a very challenging winter
ahead, with much higher prices for gas and electricity.
The regulator said that the change will also allow households to
see bills falling more quickly when wholesale prices ease. There
are 24 million customers protected by the price cap in Britain.
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
August 04, 2022 04:42 ET (08:42 GMT)
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