Eco-Living Magazine

Ofgem Could Raise the Energy Price Cap More Often

Posted on the 24 November 2021 by Ecoexperts @TheEcoExperts

Why is this happening?

This is happening because Ofgem has bowed to pressure from the energy industry.

The UK has been enduring an energy crisis in the latter part of 2021, with more than 20 suppliers going bust over three months, and 4.2 million customers forced to move companies.

During this turbulent time, energy suppliers have lobbied Ofgem to raise or even destroy the price cap, after companies were forced to temporarily charge consumers a lower price than they originally paid for the energy.

Ignacio Galan, CEO of Iberdrola, which owns Scottish Power, told BBC News: "The price cap decision was made in a very particular situation, to protect the consumer. But when the situation changes, it doesn't work."

He added: "The price cap was made on a temporary basis, and I don't know why it has been maintained."

Uswitch energy policy expert Justina Miltienyte blamed the cap for Bulb's recent demise, saying the UK's seventh-largest supplier was "choked off by the way the government decided to structure the current energy market with the price cap."

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