Ofgem has lowered its estimates for next year’s fuel bills in response to new data from DECC on consumers’ energy use.
The regulator’s prediction for an average dual fuel energy bill over the next 12 months is now more than £100 cheaper than before, according to the revised Supply Market Indicators (SMIs).
These indicators are designed to make the energy market more transparent by giving estimates of a normal energy bill, how much it would cost a typical supplier to provide the energy and how much the supplier would make in profit.
Ofgem cut its estimates yesterday after a DECC report showed the average energy use of households was less than previously thought. Since January 2010 household consumption had been pegged at 16,900 kWh per year for gas and 4,000 kWh for electricity. Those figures have now been reduced by 9% and 5% respectively.
The regulator had earlier predicted an average dual fuel bill of £1,420 for the next year starting in September, with suppliers making £90 in profit. It now expects a dual fuel bill for the next 12 months to be £1,315, leaving suppliers with a £65 profit margin.
The figures for separate gas and electricity bills were also revised down. Ofgem lowered its prediction for a typical gas bill down to £755 – a drop of £70 – with suppliers making £65 in profit – £10 less than before. The estimate for electricity bills fell by £30 – down to £600 – with the profit margin reduced by £5 to £45.