Gas poverty campaigners on Thursday hit out at a choice to move on rises in wholesale fuel and electrical energy costs to British households a lot quicker after Ofgem confirmed the power value cap could be altered each three months as an alternative of twice a yr.
The power regulator insisted the modifications have been required to forestall one other large-scale disaster within the power retail sector following the collapse of greater than 30 suppliers since January 2021 amid surging wholesale costs.
However the determination has deeply angered some gas poverty campaigners, who argue that the present system — whereby the cap is altered solely twice a yr on April 1 and October 1 — protected households from the worst of the wholesale value will increase over the crucial winter interval when fuel utilization soars as customers fireplace up their heating.
The regulator, strongly criticised for permitting too many poorly capitalised firms to enter the market in recent times, has been accused of siding with power teams somewhat than customers.
Simon Francis, co-ordinator for the Finish Gas Poverty Coalition, mentioned the choice was “merely inhumane” and would drive extra individuals into gas poverty in the midst of winter.
Peter Smith, director of coverage and advocacy on the gas poverty charity Nationwide Power Motion, mentioned the transfer from twice yearly to quarterly value cap updates “wasn’t mandatory” and would result in additional will increase in home power payments simply after Christmas, “in the midst of heating season when power prices are sometimes at their highest”.
“January can be normally a time of elevated psychological well being issues and additional hikes in payments will sadly result in elevated distress and large nervousness for power customers throughout Nice Britain, significantly for the poorest households,” added Smith.
Analysts have warned that the worth cap, which dictates a most value suppliers can cost per unit of power and limits their revenue margins, may rise 70 per cent in October to nearly £3,360 a yr per family on common, earlier than hitting greater than £3,600 in January. The cap dictates payments for 24mn households.
Ofgem chief government Jonathan Brearley acknowledged the scenario was “deeply worrying for many individuals” however insisted: “The trade-offs we have to make on behalf of customers are extraordinarily troublesome and there are merely no simple solutions proper now.
“At present’s modifications guarantee the worth cap does its job, ensuring clients are solely paying the actual price of their power, but in addition that it could actually adapt to the present unstable market,” he added.