Letter to Ofgem regarding its first working paper on the design of the forthcoming energy price cap

Working paper 1: setting the default tariff cap 269 KB

We are broadly supportive of Ofgem’s proposals.  

In this submission, we encourage it to design the cap as though it were a permanent intervention, given that it may be in place for five years and form the basis of longer term support for vulnerable consumers.

We also encourage Ofgem to consider updating the costs data used in setting the level of a cap from that which it inherited from the Competition and Markets Authority, to set separate caps for Standard Credit and Direct Debit customers, and to give thought to the inclusion of a mechanism for incentivising year on year improvements in efficiency.