In an open letter addressing the ongoing review of additional wholesale costs and benefits for the period from October 2022 to September 2023, the energy regulator has announced a delay in the follow-up consultation.
The intended consultation, originally scheduled for late September, has been rescheduled to late November or early December 2023 to ensure the analysis and calculations involved are “robust”.
The letter also outlines the framework for assessing whether an adjustment to the cap on energy prices is warranted and invites stakeholders to provide their views and comments on the matter by 23rd October
Wholesale gas and electricity prices, which were historically high, have seen a significant reduction since reaching their peak in the second half of 2022 and early 2023.
With prices stabilising, the regulator is revising its approach to retail regulation to adapt to the changing market conditions, including a review of the default tariff cap formula to align it with the costs faced by energy suppliers.
The regulator initiated a review of suppliers’ wholesale costs for default tariff customers between October 2022 and September 2023, aiming to determine whether an adjustment to the price cap is necessary, in either direction.
Following an open letter in July, a Request for Information was sent to relevant suppliers to gather evidence and information for this assessment.
The delay in the consultation will also impact the implementation date of any adjustment, potentially moving it from January 2024 to April 2024, at the earliest.
