Households could see their energy bills increase and decrease much more frequently under new proposals being drawn up by the energy regulator Ofgem. Currently, bill limits are reviewed two times a year, with the latest review resulting in bills going up for millions of people.
However, the new rule would see the limits reviewed four times a year, The Mirror reports. Ofgem is reviewing its price cap, which limits how much consumers pay for energy.
The price cap works by limiting how much the average home pays for power every year, if they pay by direct debit on a variable rate tariff. The price cap is currently reviewed once ever six months.
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Ofgem is now consulting on doing this every four months. An Ofgem statement 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.
"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." Ofgem chief executive Jonathan 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. 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.”
Ofgem currently reviews the price cap in April and October. The regulator increased this cap from £1,277 to £1,971 in its review in April 2022.
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 unit rate 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. It was introduced in 2019 and is based on a number of factors including the wholesale cost of power in the previous six months.
How to get help with your energy bills
British Gas has an Energy Trust fund that can be accessed by anyone, not just British Gas customers, providing you meet the eligibility criteria. Help is also available from the following energy providers, if you’re an existing customer:
