The regulator has launched a consultation on a range of options for the future of the price cap.
Ofgem is to consider a new “dynamic” price cap based on the time of day households use their energy, it has announced.
As more households adopted time-of-use tariffs, it could become harder to retain a universal price cap that was suitable for everyone. Ofgem said the price cap, along with the temporary ban on acquisition-only tariffs, had worked well to protect customers from the “loyalty penalty”, where customers on default tariffs paid higher prices, and from the worst of the recent volatile markets and wholesale price surges that were a result of the energy crisis.
“We will continue to work with government, industry, consumer groups, charities and the public on the future of pricing regulation. Our aim is ensure the market works for everyone.” “However, our recent research has shown that this has come at a price, with effective competition and innovation in the market suffering and switching levels falling off a cliff.
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