The British energy market regulator OFGEM has committed to introduce the new price-cap on gas and electricity prices by Christmas 2018 – if legislation is passed this summer.
The price cap, outlined in government legislation unveiled last week, will protect these people from being overcharged for their energy.
Around 12 million households are currently on poor value default deals, paying as much as £300 more than those on the cheapest tariffs.
Many of these households have never switched, or have not done so for years.
Last month, the government introduced the Domestic Gas and Electricity (Tariff Cap) Bill before Parliament, which details the proposed new statutory role for OFGEM to deliver a price cap for all consumers on default tariffs, including standard variable tariffs.
OFGEM will publish a statutory consultation and draft licence conditions for suppliers this summer. It will then set the level of the cap, based on the latest estimates of energy costs, in the autumn.
Following a brief implementation period for suppliers, the cap should be in place by the end of the year.
7 Mar 2018
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