Ofgem plans to extend price cap monitoring period

16/03/2022 11:47
Sept - Energy regulator Ofgem says gas crisis not its fault.jpg

Ofgem has said it could extend the price cap monitoring period to better reflect the market costs for energy suppliers. 

In recent months, skyrocketing energy prices have forced many suppliers to exit the market.

A few days ago, Energy UK sent a letter to the Chancellor calling for more support for businesses.

Emma Pinchbeck, the trade association’s Chief Executive, wrote: “Volatility in the international gas market in 2021 has already seen wholesale gas price spikes of up to 500%, 29 UK retail energy suppliers exit the market and an energy bill rise this April which we estimate will put an additional one million UK households into fuel poverty.”

The energy regulator’s objective is to make the price cap methodology more resilient to volatile wholesale markets.

It is believed it could reduce the financial risk to suppliers and costs to customers.

Ofgem plans to use forward market prices from closer to the point of delivery to calculate the cap level.

The regulator said: “The price observation window would be from 1st March to 31st August for the winter period, one month later than the current observation window.”

Read the full story here.

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