Energy bills could fall in price under plans from regulator Ofgem to cut standing charges.
These bills have already shot up for millions of households across the UK after Ofgem hiked the April price cap to just under £2,000.
This price cap limits how much the average home on a variable rate deal pays for energy each year, and is expected to rise to £2,800 in October.
But Ofgem chief executive Jonathan Brearley said today that the energy regulator is investigating if it can trim standing charges, which make up part of energy bills.
A standing charge is what you pay to your energy supplier even without using any electricity or gas and is added to most bills.
Electricity standing charges are around 45p a day per households, and 27p for gas.
That adds up to £164.25 a year for electricity and £98.50 for gas, even before you use any energy.
Brearley, speaking on BBC Breakfast today, said Ofgem is investigating if it can trim standing charges to help with energy bills.
He said: "One thing we are doing is looking at how that standing charge is made up. We are looking at components of it to see, potentially, if it can be reduced."
Standing charges vary depending on where you live and who your energy supplier is.
Why are energy prices going up so much?
The overriding reason is wholesale prices, or how much suppliers pay for the energy they then sell on to us.
Those costs have rocketed in the past year, partly because economies around the world emerging from Covid lockdowns have all wanted gas at the same time.
Limited supplies of gas haven’t helped. And rising global oil prices have affected gas costs too.
What is the Ofgem energy price cap?
Despite what its name suggests, the price cap isn't a limit on how much you pay for energy.
Instead, it sets a limit on the rates a supplier can charge for each unit of gas and electricity you use and is reviewed twice a year.
The price cap is altered every six months, in April and October but Ofgem has proposed to change this to every three months instead.
This means it would be reviewed again in January.
Ofgem first introduced the price cap in 2019 and it is based on a number of factors including the wholesale cost of power in the previous six months.
