Ofgem sets new price cap prompting calls for energy bill help
By Kevin Peachey
Cost of living correspondent
The amount suppliers can charge households for energy has been cut by regulator Ofgem but bills will still rise in April as government help eases.
Ofgem's announcement does not directly affect what customers pay for each unit of gas and electricity but it reduces the costs faced by government.
The typical household bill will rise to £3,000 a year in April.
Campaigners say ministers should stop the increase because Ofgem's new cap reduces the cost of support.
The typical annual household bill is set to rise from £2,100 to £3,000 in April because government help - known as the Energy Price Guarantee (EPG) - will become less generous and a £400 winter discount on all bills ends.
The government currently compensates energy suppliers with the difference between the guarantee and Ofgem's cap.
The energy price cap was £4,279 in January but on Monday, Ofgem announced that the cap would drop to £3,280 in April because of falling wholesale prices.
TUC general secretary Paul Nowak said: "Energy bills are out of control. The government must cancel April's hike. With the cost of wholesale gas plummeting ministers have no excuse for not stepping in."
Chancellor Jeremy Hunt previously told the BBC that although the policy remained under review, he did not think the government had the "headroom to make a major new initiative to help people". Ministers also point out wider support, such as rising benefit payments in April, will help people.
Under the government guarantee, a household using a typical amount of gas and electricity in England, Wales and Scotland is currently paying £2,500 a year for energy.
Without state support, that annual bill would have been £4,279 since January.
The chancellor has already announced that the EPG will become less generous in April, which means the typical household will be paying £3,000 a year.
Ofgem has now announced what that bill would otherwise have been £3,280 from April to July, without the guarantee.
Ofgem's chief executive, Jonathan Brearley, said that April's rise in bills was "deeply concerning" for many people, but there was some hope ahead.
"Today's announcement reflects the fundamental shift in the cost of wholesale energy for the first time since the gas crisis began, and while it won't make an immediate difference to consumers, it's a sign that some of the immense pressure we've seen in the energy markets over the last 18 months may be starting to ease," he said.
https://www.bbc.co.uk/news/business-64748135