“Ofgem also recently wrote to suppliers to alert them to a series of market compliance reviews to ensure, amongst other things, that they are handling direct debits fairly, and that overall, they are held to higher standards for performance on customer service and protecting vulnerable customers.”
The regulator’s CEO Jonathan Brearley said in a statement: “Our top priority is to protect consumers by ensuring a fair and resilient energy market that works for everyone.
Ofgem is putting the proposal out to consultation following criticism the twice-yearly adjustment arrangement – in April and October – was a key driver when suppliers began collapsing at the height of the wholesale gas price shock. The cap, which is the system that determines bills for 22million UK households, was credited with protecting families from the worst of the hikes in raw energy costs, prevented companies passing on the increases to their customers.
This delayed the most hard-hitting part of the current cost of living crisis which has seen households hit by the shock rises all in one go.
Consequently, the average bills skyrocketed by 54 percent, or £693 annually, from April to £1,971.
Ofgem insisted its new proposals would enable greater flexibility that would see bills to rise or decline more quickly.
The energy regulator said: “A more frequent price cap would reflect the most up to date and accurate energy prices and mean when prices fall from the current record highs, customers would see the benefit much sooner.
Energy crisis warning: Millions of UK homes could face fresh price hikes (Image: GETTY)
“This change would also help energy suppliers more accurately predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures which ultimately push up costs for consumers.
“This is all part of a range of plans to make the market fairer and more resilient, such as stress tests for suppliers and a more robust scrutiny of supplier business plans.
“Ofgem also recently wrote to suppliers to alert them to a series of market compliance reviews to ensure, amongst other things, that they are handling direct debits fairly, and that overall, they are held to higher standards for performance on customer service and protecting vulnerable customers.”
The regulator’s CEO Jonathan Brearley said in a statement: “Our top priority is to protect consumers by ensuring a fair and resilient energy market that works for everyone.
“Our retail reforms will ensure that consumers are paying a fair price for their energy while ensuring resilience across the sector.
“Today’s proposed change would mean the price cap is more reflective of current market prices and any price falls would be delivered more quickly to consumers.
“It would also help energy suppliers better predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures, which ultimately pushes up costs for consumers.
“The last year has shown that we need to make changes to the price cap so that suppliers are better able to manage risks in these unprecedented market conditions.”
