The Chief Executive of Ofgem, Jonathan Brearley, has called for a comprehensive reevaluation of the effectiveness of the energy price cap in shielding vulnerable customers against escalating costs.
In a recent interview on Sky News, Mr Brearley acknowledged the positive steps taken with the new price cap announcement while underscoring the need for a more thorough assessment of its impact and alternatives.
The energy regulator disclosed last Friday that the average energy bill will be around an estimated £1,923 per year, starting from 1st October.
However, concerns have surfaced following a report from the Resolution Foundation, revealing that rising standing charges could lead to higher bills for approximately seven million households during the upcoming winter months.
Brearley stressed the importance of collaborative efforts between Ofgem, the government and the industry to ensure that support reaches those most need it.
“Things are changing, the market is stabilising but there’s more for all of us to do,” he said, underlining the necessity for collective support.
Mr Brearley emphasised the evolving nature of the energy market and its increased volatility, which underscores the necessity of revisiting the current pricing regulations.
In response to queries about the energy price cap’s effectiveness against rising prices, Mr Brearley advocated a holistic view of pricing regulation, considering the dynamic market changes in the past three years.
Ofgem’s chief highlighted the need to compare the cap’s performance to potential alternatives and urged the government to explore and decide.
Mr Brearley proposed diverse avenues for potential reform, such as introducing flexibility to adapt to market dynamics and exploring a social tariff to alleviate the financial burden on the most vulnerable.
“We would like to see all of that in the mix,” he asserted, suggesting a comprehensive approach.
