The price of energy bills could change more frequently under new plans from Ofgem.
The energy regulator's plans would see the price cap on household energy bills reviewed every three months, taking the total to four a year. Ofgem said on Monday it might insert two new reviews a year, one in January and another in July.
After a consultation, Ofgem hopes that the changes could come into force from October. This would mean the first change under the new system would be made in January 2023.
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The energy price cap is currently reviewed every six months and changed in October and April. April 2022 saw the cap rise by almost £700, taking it to a record £1,971 per year for the average household on a standard variable tariff.
Ofgem considers a range of information when deciding where the price cap should be set. The price that energy suppliers pay for the gas and electricity they buy is a major part of this.
Over the last year gas prices have risen so rapidly that suppliers were often forced to sell the gas for less than they bought it for due to the price cap. By changing the price cap more often, Ofgem will make it more reflective of international gas prices, taking some of the pressure off suppliers.
It would help pass on savings from a potential fall in gas prices to customers more rapidly, Ofgem said, and also protect under-pressure energy suppliers from being damaged by the cap.
Ofgem chief executive Jonathan Brearley said: "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."
The proposed changes to the cap will also allow suppliers to recover some other costs in a better timescale. Mr Brearley said: "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."
