Energy regulator Ofgem is suggesting that the energy price cap be updated quarterly rather than every six months.
This is only a proposal at this stage, not a definite action - but would this help tenants and therefore landlords manage their energy spending better?
In addition to the huge price leap of over 50 per cent revealed last month when the price cap was reviewed, the next scheduled review - in October - is set to see yet another increase.
Industry estimates suggest another £600 a year increase for a typical household, taking the annual bill to £2,600. After that, prices are expected to fall back, but not by significant amounts.
Ofgem says a more frequent price cap would reflect the most up to date and accurate energy prices and mean when prices fall from the current record highs, customers would see the benefit much sooner.
This change would also help energy suppliers more accurately predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures which ultimately push up costs for consumers.
“Our top priority is to protect consumers by ensuring a fair and resilient energy market that works for everyone. Our retail reforms will ensure that consumers are paying a fair price for their energy while ensuring resilience across the sector” explains Jonathan Brearley, the regulator’s chief executive.
He continues: “[This] 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.”
Ofgem says the current method means that consumers are not able to reap the benefits of falling gas prices quickly enough.
This consultation - if it results in a decision to implement - would allow Ofgem to bring in the changes from October this year.
Ofgem also recently wrote to suppliers to alert them to a series of market compliance reviews to ensure, amongst other things, that they are handling direct debits fairly, and that overall, they are held to higher standards for performance on customer service and protecting vulnerable customers.
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