Energy price cap rethink sparks fears of higher bills. Nine energy suppliers have collapsed since the start of September, with concerns many more will follow within weeks. Ofgem has opened the door to a major relaxation of energy price cap rules which would expose millions of households to the risk of sudden price increases. The regulator signalled it was considering a review of how the energy price cap works after turmoil in the industry triggered by a surge in wholesale prices. The cap prevents energy companies from immediately passing on higher costs to their customers, forcing many suppliers to the brink of bankruptcy. Several companies have pushed for a review of the cap, arguing they cannot survive a six-fold rise in wholesale gas prices and four-fold rise in wholesale power prices without being able to pass on more to their customers. The cap’s level is only reviewed twice a year. However, Ofgem is understood to have ruled nothing out in a review of the cap, including how it is calculated and how frequently it can be adjusted.
Telegraph 7th Oct 2021 read more »