Ofgem looks at activating stabilisation measure

Ofgem has launched a consultation to activate a measure aimed at supporting market stability.

During the previous gas crisis the regulator implemented a Market Stabilisation Charge (MSC) as a mitigation.

The charge was a payment from a supplier who gained a customer to a supplier who lost a customer, to partially mitigate losses on energy already purchased.  

Ofgem reintroduced an MSC licence condition earlier this year. Given recent wholesale price increases, it is now proposing to activate it in a move it said would help protect consumers’ interests by supporting market stability and investability. 

The regulator noted that wholesale gas and electricity prices have been high and volatile this year as a result of the conflict in the Middle East. Prices have risen since July to around 200p/therm, about 150% higher than their pre-conflict levels