The consumer champion Martin Lewis has apologized for swearing at Great Britain’s energy regulator after it announced changes to its price cap on bills.
Ofgem has confirmed it is planning to update the energy price cap four times a year from October to allow it and consumers to adjust more quickly to volatile markets.
The regulator on Monday published a consultation on proposals to introduce new reviews of the price cap in January and July, adding to existing changes in April and October.
Lewis, the founder of the consumer advice site MoneySavingExpert, apologized after swearing on a press call with the regulator regarding its approach. He accused Ofgem of selling consumers “down the river” and wants it to do more to tackle the energy crisis.
Lewis said had had “good meetings” with Ofgem and apologized again for the “emotional rant”.
Lewis later clarified that he had not been angry about the plan to switch to updating the cap four times a year but had been concerned over Ofgem proposals to bring in a “market stabilization” charge on companies that introduce cheap deals, which he was concerned could be bad for consumers.
Under the proposals, suppliers who win customers with cheaper deals would have to pay the old supplier 85% of the difference in tariffs. The regulator argues that it would protect companies from being destabilized but Lewis said it would deter competition.
He had also tried to persuade the regulator to consider cutting fixed charges to consumers regardless of their energy usage.
Ofgem’s proposals came after a period of turmoil on global energy markets pushed up gas prices in the UK and across the world – becoming a driving force in global inflationary pressure. The price increases were prompted by the snap-back in global energy demand after coronavirus lockdowns followed by the invasion of Ukraine by Russia, Europe’s biggest gas supplier.
In response, in April average prices in Great Britain rose by a record 54% to £ 1,971. A further increase is expected to as much as £ 2,600 for the winter.
The scale of the price rise – and the collapse since September 2021 of 29 British energy suppliers that failed to hedge appropriately against rising wholesale energy costs – has prompted scrutiny of Ofgem’s roleand the ways it could help consumers further.
Jonathan Brearley, Ofgem’s chief executive, said: “Today’s 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.
“The last year has shown that we need to make changes to the price cap so that suppliers are better able to manage risks in these unprecedented market conditions.”
The proposals announced on Monday also included tweaks to the methodology of working out the price cap, which the regulator hopes will result in energy suppliers being able to recover costs during unusual market conditions. Ofgem argued that without these changes fewer energy suppliers would remain in the market, meaning it would be “unlikely that there will be the investment needed for the net zero transition”.
Matthew Cole, the chair of trustees at the Fuel Bank Foundation, said: “We welcome that Ofgem is pulling the levers that it can pull to address the energy crisis. But there is a risk that by switching to quarterly you give people a bigger shock. If you know bills are going up a certain amount in six months’ time then that gives you time to plan.
“There needs to be a coordinated package of measures to help people with their energy bills.”