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Energy consultation responses

Response to Ofgem's call for input paper on adapting the price cap methodology for resilience in volatile markets

13 January 2022

Ofgem was asking for views on whether the energy price cap needed to be modified to allow it to respond to volatile wholesale market conditions. We expressed support for one of the three ideas it was testing, moving to a quarterly cap, while expressing concern about suggested alternatives that would allow for its reopening within price cap periods, or see the introduction of exit fees on default tariffs.

Response to Ofgem's consultation on the process for updating the default tariff cap methodology and setting maximum charges

14 December 2021

Ofgem was consulting on whether it should be able to re-open the energy price cap on an ad hoc basis, to allow it to adjust for rapidly changing wholesale prices. We argued that it should not, given the uncertainty and subjectivity inherent in its proposals, and that it might have retrospective effect. Moving to reset the level of the cap more frequently, perhaps quarterly, might provide a better way for it to remain up to date than Ofgem taking ad hoc adjustment powers.