Proposed caps for energy bills announced

Proposed caps for energy bills announced

Britain’s regulator proposed a price cap on default energy bills to save households about a billion pounds a year

They aim to implement it in time for winter following a government promise to tackle “rip-off” prices.


The energy regulator, Ofgem, said it wanted to cap the default electricity and gas bill at 1,136 pounds a year, a level below the most-used tariffs set by the country’s big six suppliers but not as severe as some had expected.

Shares in Centrica (CNA.L), whose British Gas is the largest household energy supplier in the country, SSE (SSE.L) and EDF Energy (EDF.PA), rose after the announcement.

Shares in E.ON (EONGn.DE), Innogy (IGY.DE), whose Npower is a supplier, and Iberdrola (IBE.MC), which owns Scottish Power, were little changed or slightly lower.

Ofgem will review the cap twice a year and adjust according to changing costs such as wholesale energy prices.

The cap will be in place by the end of this year but reviewed in February, with any changes due to take effect in April. It is expected to rise at that point because of higher winter gas prices on the wholesale market.

The regulator was tasked with setting a cap by parliament after an influential committee of lawmakers called Britain’s energy market “broken”. Prime Minister Theresa May said the energy tariffs were a “rip-off”.

Energy bills have risen despite years of market reform, becoming an easy target for the increasingly left-leaning opposition Labour party, prompting a promise to get prices under control by May’s usually free-market Conservatives.


Published: by Radio NewsHub
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