Energy bills to rise as Ofgem brings forward price cap announcement
Ofgem has announced it will reveal the full scale of the energy price cap hike earlier than expected, as it emerged that the government may introduce a measure to slash £200 from household energy bills in order to soften the blow.
The energy regulator will announce at 11am on Thursday what is expected to be the steepest ever increase in household bills, amid growing speculation that the Treasury is considering a multibillion-pound move to protect households from the full brunt of the increase.
Ofgem is understood to have brought forward its planned announcement on rising energy bills, originally set for this coming Monday, to help ease growing concern and speculation over the maximum energy tariff.
The price cap is expected to climb by more than 50% to reach almost £2,000 a year, up from an average of £1,277 this winter, to reflect the record high gas energy market prices caused by the global crisis in supply.
The surprise decision to move forward the energy cap announcement comes after it emerged that the government is looking at underwriting loans to energy suppliers in order to protect households from rocketing bills.
The Guardian understands the Treasury is considering the “broad-brush financial support” as well as extra payments for vulnerable customers who will be hit hardest by the price cap increase.
The multibillion-pound plan to “top slice” bills would allow suppliers to borrow government money and soften the financial impact on their customers by paying the loans back through higher tariffs over the coming years, according to senior industry sources.
The scheme is one of a number of measures put forward by energy industry bosses to help protect customers against the steepest increase in billls on record.
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