GB regulator to raise household energy price cap
Sky-rocketing wholesale gas prices will feed through into millions of household gas and power bills from October 1, the UK's energy regulator warned July 27. Front-month gas at the UK National Balancing point was close to £1/therm (about $14/mn Btu).
The regulator can limit the price charged by retail suppliers, which could force more of them into bankruptcy as they buy high and sell cheaply. This time last year prices were at record lows. Ofgem urged retailers to "provide all available help and support to customers who are struggling as a result of this price change."
The increase will affect around 15mn households on variable or default rates and prepayment meters – half the population – who are covered by the cap. Ofgem adjusts the cap twice-yearly.
It said: "Since we last updated the level of the cap in February, the wholesale electricity and gas prices it tracks have increased by over 50%. Rising gas prices increases the cost of heating homes and also pushes up electricity prices."
Ofgem said it was "working collaboratively with the industry on a package of further help for those in difficulty this winter." It does not regulate the energy markets of Northern Ireland.