Published: Fri, October 13, 2017
Sport | By Gary Shelton

No energy bill price cap this winter, Ofgem says

No energy bill price cap this winter, Ofgem says

Business and Energy Secretary Greg Clark said that customers of the big six energy suppliers were "overpaying to the tune of £1.4bn a year".

But the price cap is unlikely to take effect before winter.

The business department set out its draft legislation, saying the price cap would initially last until 2020, with the potential to be extended by up to three years if needed.

The Department for Business, Energy and Industrial Strategy states that more than 18 million households in Great Britain are now on a standard variable tariff or other default tariff.

Ofgem, the energy regulator, has already capped bills for those on pre-payment meters and yesterday announced that it will extend the cap to 1million more vulnerable households this Winter.

Speaking ahead of the draft bill's publication, Mrs May said: "I have been clear that our broken energy market has to change - it has to offer fairer prices for millions of loyal customers who have been paying hundreds of pounds too much".

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Ministers confirmed that energy regulator Ofgem would be compelled to implement the cap once the law had given it new powers. It will consult on the design of the price cap for default deals while the government's draft bill progresses through parliament. This will also apply to another two million vulnerable households the following winter. Ofgem says the price difference between the average standard variable tariff default deal and the cheapest rate in the market recently hit more than £300.

More than 18 million customers are now on standard variable tariffs or other default tariffs - many of which see them paying more despite their loyalty.

Following the initial announcement by May at the Conservative party conference, two United Kingdom listed energy companies, Centrica and SSE saw a total, combined total of £900 million wiped off the value of their companies.

Dermot Nolan, chief executive of the energy regulator Ofgem, gave a less-than-ringing endorsement of Theresa May's flagship price-caps plan this morning.

It would be a fitting end to a tortuous tale if price caps for standard variable tariffs were introduced in a year's time - only for those tariffs to have melted away in the meantime.

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