{"id":2688,"date":"2022-12-27T23:31:15","date_gmt":"2022-12-27T23:31:15","guid":{"rendered":"https:\/\/dev.farnes.net\/warmbox\/?p=2688"},"modified":"2022-12-27T23:31:15","modified_gmt":"2022-12-27T23:31:15","slug":"history-of-ofgems-commercial-energy-price-cap-a-timeline","status":"publish","type":"post","link":"https:\/\/dev.farnes.net\/warmbox\/history-of-ofgems-commercial-energy-price-cap-a-timeline\/","title":{"rendered":"History of Ofgem’s Commercial Energy Price Cap: A Timeline"},"content":{"rendered":"

\u00a0History of Ofgem’s Commercial Energy Price Cap: A Timeline<\/b><\/h1>\n

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\u00a0Are you, as a business owner wondering if the commercial energy price cap set by Ofgem is helping protect businesses from being overcharged? If so, this article is for you. We will look at the history of Ofgem’s commercial energy price cap, from its introduction in 2019 to its current level in 2021. We\u2019ll also explore how this policy has impacted businesses and assess any changes that may have occurred over time. So read on to better understand commercial energy pricing regulations – and whether or not they’re working!<\/span><\/p>\n

What is Ofgem<\/strong><\/h2>\n

Ofgem is the UK energy regulator. <\/span>To protect consumers, Ofgem introduced a temporary Energy Price Cap (EPC) on 1 January 2019 to limit the total amount suppliers can charge customers for their energy. This article looks at how the EPC works, who it applies to and the impact it has had.\u00a0<\/span><\/p>\n

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What is the Energy Price Cap?<\/strong><\/h2>\n

The EPC is a government-imposed limit on the total cost of a standard unit of energy (electricity or gas), including all taxes, levies and other charges. It is currently set at \u00a31,138 per year for a typical dual-fuel household using 3,100 kWh of electricity and 12,000 kWh gas per year. The cap applies only to customers with \u2018default\u2019 or \u2018standard\u2019 tariffs and does not include prepayment meters or certain fixed-term contracts.\u00a0<\/span><\/p>\n

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How Does It Work?\u00a0<\/strong><\/h2>\n

The EPC limits how much suppliers can charge customers for their energy. This means that even if wholesale prices rise, suppliers cannot pass on these higher costs to customers as the cap limits them. Instead, any additional costs are borne by the suppliers themselves. In April and October, Ofgem reviews and adjusts the price cap twice a year in line with changes in wholesale energy prices.\u00a0\u00a0<\/span><\/p>\n

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Who Does It Apply To?\u00a0<\/b><\/h2>\n

The Energy Price Cap applies to all domestic customers with \u2018default\u2019 or \u2018standard\u2019 tariffs, which comprise around 70% of households in Great Britain (England, Scotland and Wales). These are typically variable rate tariffs where customers can switch suppliers without penalty or fees. It does not apply to prepayment meters or certain fixed-term contracts, such as those on Economy 7 rates or night storage heaters.\u00a0<\/span><\/p>\n

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Impact of the Energy Price Cap\u00a0<\/b><\/h2>\n

Since its introduction in January 2019, Ofgem estimates that over 12 million households have saved an average of \u00a375 compared to what they would have paid without the cap. In addition to these direct savings, there has been an indirect positive impact on competition between suppliers leading to even lower costs for consumers as they look for ways to remain competitive within the market whilst operating under the cap restrictions.\u00a0\u00a0<\/span><\/p>\n

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Advantages of the Energy Price Cap\u00a0<\/b><\/h2>\n

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