Posted on: 08/01/2019
The UK Government’s energy price cap came into force on 1 January with the aim of bringing down energy costs for 11 million customers by £1 billion a year.
The price cap will remain in place until at least 2020, limiting the unit price for gas and electricity on standard variable or default fixed-term tariffs.
Prime Minister Theresa May said: “Our energy price cap will cut bills for millions of families and people across the UK who have been ripped off by energy companies for far too long.
“We’re working with regulators and industry to ensure that consumers are not unfairly overcharged in the future – whether on their phone bills or their insurance premiums.”
More action needed
But Alex Neill, Managing Director of Home Products and Services at consumer group Which?, warned: “The energy price cap can only be a temporary fix – what is now needed is real reform to promote competition, innovation and improved customer service in the broken energy market.
“The regulator needs to closely monitor and report on how the cap affects cheaper deals on the market to ensure that customers will still be encouraged to switch and save money.”
Gillian Guy, Chief Executive of Citizens Advice, added: “While people on default tariffs should now be paying a fairer price for their energy, they will still be better off if they shop around.”
Three renewable energy suppliers – Good Energy, Ecotricity and Green Energy – have all had tariffs temporarily exempted from the price cap. They can now apply for a permanent derogation.
Juliet Davenport, chief executive and of Good Energy, said that long-term investment in renewables is required if Britain is to “kick its fossil fuel habit”.
“Derogation means we can continue paying generators a good price, establishing a clean energy marketplace. It also means our commitment to research and development, particularly home energy generation, is strengthened,” she said.