Citizens Advice has today called for suppliers to follow the lead of the energy regulator Ofgem by identifying where lower electricity market costs can be passed onto consumers as price cuts.
Ofgem has announced it will reduce the level of the prepayment meter cap from about £1,067 to £1,048 on average, for a dual fuel prepayment customer who uses a typical amount of energy. The regulator said the reduction has been driven by lower forecast wholesale costs in supplying electricity to prepayment meter customers for the period starting 1 October and lower than expected costs to consumers of the government’s Capacity Market auction for the coming winter.
Gillian Guy, chief executive of Citizens Advice, said “Energy suppliers should be looking to follow the regulator’s lead by identifying where lower costs can be turned into price cuts for their customers. Ofgem’s decision to pass on lower electricity costs to consumers by reducing the level of safeguard tariff for prepayment meter customers is right – and will mean millions of often poorer households will get some relief on their energy bills.”
“We also think energy firms should consider how they can take similar action to pass on any reductions for supplying electricity to credit meter customers, where this is possible. The regulator has an opportunity to widen the protection of the prepayment meter cap to help more of the worst-off customers on standard variable tariffs, as well. Extending the prepayment safeguard tariff to all credit meter households eligible for the Warm Home Discount will mean Ofgem can quickly pass on reduced costs to more people who can least afford to be overpaying for their energy.”