UK's Ofgem Updates Energy Price Cap
UK energy regulator Ofgem has announced its update to the energy price cap from January 1 to March 31, 2023.
The cap is set to rise to an annual level of GBP 4,279 ($5,185) in January 2023, but Ofgem highlighted that bill-payers remain protected under the government’s Energy Price Guarantee (EPG) until the end of March 2024. The energy price cap level indicates how much consumers on their energy supplier’s basic tariff would pay if the EPG were not in place, Ofgem stated.
“The price cap has been in place since January 2019, and it is a legislative requirement for Ofgem to regularly review the level at which it is set,” Ofgem said in an organization statement.
“It ensures an energy supplier can recoup its efficient costs, whilst making sure customers do not pay a higher amount for their energy than they should. The price cap, as set out in law, does this by setting a maximum suppliers can charge per unit of energy,” Ofgem added.
“There is no immediate action for consumers to take as a result of today’s announcement,” the organization continued, adding that the next quarterly price cap update will be on February 27, 2023.
Commenting on Ofgem’s update to the energy price cap level, a Department of Business, Energy and Industrial Strategy (BEIS) spokesperson said, “the Energy Price Guarantee is protecting consumers from soaring energy costs, meaning people’s bills will not rise in line with today’s Ofgem energy price cap increase”.
“A typical household in Great Britain will save around GBP 900 ($1,090) this winter thanks to Government’s intervention to limit how much suppliers can charge per unit of energy, easing the burden on household incomes,” the spokesperson added.
“This comes on top of a GBP 400 ($484) discount for all households on their energy bills this winter,” the spokesperson continued.
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