Ofgem commits to energy price cap by end of 2018

Legislation will have to be passed by Parliament this summer for the regulator to ensure the price cap is set this year

By Priyanka Shrestha

Ofgem has committed to put the energy price cap in place by the end of 2018 provided legislation is passed this summer.

The price cap, which was introduced to Parliament last week, will protect around 12 million households on poor value default tariffs who are said to be currently paying as much as £300 more than those on the cheapest tariffs.

The timeframe for implementation would include the statutory requirements both to consult on the change for at least 28 days and to allow a 56-day period between publishing Ofgem’s final decision and the license condition changes taking effect.

The level of the cap would be based on the latest estimates of energy costs in the autumn.

The prepayment safeguard tariff is currently in place for five million households and Ofgem is working on extending it to protect a further two million homes.

It is also working on extending the safeguard tariff for a further two million households next winter and next day switching.