Ofgem to extend prepayment meter tariff if no winter energy price cap
Ofgem will extend its prepayment meter safeguard tariff to 2m more households next winter if the energy price cap on default tariffs is not yet in place.
The regulator today committed to bringing the energy price cap into force by the end of 2018, but its plan still relies on government passing legislation by this summer.
Ofgem said its contingency plan was in place in the "unlikely event" of a delay.
From April, Ofgem's price cap on prepayment meters will help 5m homes save an average of average to £66 a year after being first introduced last year.
Last week, the government unveiled legislation for the energy price cap, which aims to cap default tariffs that can be as much as £300 more expensive than cheaper tariffs. Around 12 million households are currently on default tariffs.
Ofgem outlined its planned timeline today in a letter to stakeholders.
It said once parliament passes the legislation, potentially this summer, Ofgem will publish a statutory consultation and draft license conditions for suppliers.
Ofgem will then set the level of the cap, based on the latest estimates of energy costs, in the autumn.
Following a brief implementation period for suppliers, the cap should be in place by the end of the year, Ofgem said.
The regulator will outline its approach to setting the default tariff cap over the next few months, with the first working paper to be published this week.
Dermot Nolan, chief executive of Ofgem, said: “Ofgem is working with the government to implement the price cap and will ensure that consumers, particularly the vulnerable, get price protection as soon as possible.”
"Ofgem is also working to make switching easier, quicker and more reliable to help more people save money, particularly those on the worst deals, and last month launched the first-ever 'simplified' collective switch."
The energy price cap bill we be debated by MPs in parliament today.
Originally published at cityam.com
