Ofgem Reduces Energy Price Cap to £1,923
Ofgem has lowered the cap of typical household bills to below £2,000 for the first time since Russia invaded Ukraine.
In the three months from Oct. 1, the energy price cap will be £1,923, down from the current level of £2,074, for customers paying via direct debit.
A typical prepay customer can expect to pay £1,949 per year, the regulator said.
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The headline numbers are calculated by using the average amount of energy a household would consume, which is 2,900 kilowatt hour (kWh) of electricity, 12,000 kWh of gas, or 4,200 kWh for multi-register meters. Households that use more energy will pay more.
But not all households will pay less directly from their pockets. According to the Resolution Foundation, for a third of households, the bill will in effect be higher this winter compared to the last because of a rise in the daily standing charge and the end of a one-off 400 universal energy bill rebate.
Ministers are facing fresh calls to introduce a social tariff that subsidises bills of vulnerable households. An energy minister said the government “will consider any and all options.”
Prime Minister Rishi Sunak said the announcement is “really good news” for families up and down the country.”
He said ministers have taken “decisive action” by imposing a windfall tax on energy companies to help fund targeted energy support packages, and are working night and day to bring down inflation so that the money in people’s pockets can go further,” he told the BBC.
Asked about targeted support for the most vulnerable, the prime minister said that’s the approach the government is taking.
“It’s really important that we do target our support to the most vulnerable in society and that’s what we’re doing,” he said, “So the national living wage has gone up by around £1,400 for those on the lowest earnings. Pensioners are receiving an extra £300 this winter alongside their winter fuel payment and everyone on Universal Credit is receiving £900 in direct cost-of-living support because I want to make sure the most vulnerable in our society do get that extra help.”
Labour’s shadow climate change secretary Ed Miliband said the Ofgem announcement demonstrates “the scandalous Tory cost-of-living crisis is still raging for millions of people” as bills are still “significantly higher than they were only three years ago.”
He said the Conservatives “continue to side with the oil and gas companies” by refusing to “fix the gaping loopholes in the windfall tax or make the sprint we need for clean power, keeping the onshore wind ban and failing to insulate homes,” and promised Labour would “act to close loopholes and bring in a proper windfall tax on oil and gas giants” and “make Britain a clean energy superpower.”
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