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Energy bills shake-up plans to avoid price shocks - Perthshire Chamber of Commerce

Energy bills shake-up plans to avoid price shocks

Household energy bills could change every three months under new plans aimed at avoiding price shocks.

Currently gas and electricity bills are updated every six months.

The plans, proposed by the energy regulator Ofgem, would mean price falls and rises would be passed on to customers more quickly.

The price cap - which is the maximum price per unit that suppliers can charge customers - is updated twice a year in April and October.

Last month, a typical energy bill jumped from £1,277 to £1,971 and is forecast to soar a further 32% when the cap is revised again in October.

For people on prepayment meters, the price of energy has now risen by an average £708 to £2,017 a year.

Ofgem's chief executive Jonathan Brearley said: "The proposed change would mean the price cap is more reflective of current market prices and any price falls would be delivered more quickly to consumers.

"It would also help energy suppliers better predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures, which ultimately pushes up costs for consumers."

Since early last year, more than 30 UK energy companies have gone bust after firms found themselves unable to pass on the full cost of soaring wholesale gas to customers because of the price cap.

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