New measures to help businesses deal with soaring energy costs have been announced by the government.
Energy bills for businesses, charities and the public sector must be capped.
It comes after former Prime Minister Liz Truss announced a Household Energy Price Guarantee which would ensure no household pays more than £2,500 in energy bills. But new Prime Minister Rishi Sunak has announced plans to raise the energy price cap to $4,279 from January 2023.
The proposals are in response to the devastating cost of living crisis which has seen utility bills catapulted to eye-popping numbers as UK regulator Ofgem continues to announce energy price cap increases.
Here is a timeline of Ofgem’s energy price cap announcements over the past two years:
In February 2019, Ofgem announced that the cap would increase from April from £117 to £1,254.
He said the prepayment meter cap would increase by £106.
The regulator has announced a drop in the default tariff cap and the prepayment meter.
The default fare has been reduced by £75 to £1,179 while the prepaid meter has been reduced by £25 to £1,217.
Another drop was seen this month of 1% for meter and tariff caps of 1%.
The default fare has fallen to £1,162 while the prepaid meter has fallen to £1,200.
Ofgem has introduced new lower levels of typical electricity consumption to calculate the equivalent annual price cap bill figures.
The regulator has announced that the default price cap will be reduced by 7% from £1,126 to £1,042 from October 1, 2020 to March 31, 2021.
From October 1, the default price cap also included a new cap level for prepayment meter customers.
After months of cuts, Ofgem has announced that both price caps will increase from April 2021.
The price cap for default tariffs has increased by £96 to £1,138 while prepaid meters have increased by £86 to £1,156.
Ofgem has announced that both caps will increase from October 2021.
Default rate customers would see an equivalent increase of £139 to £1,277 and an increase of £153 to £1,306 for prepaid customers.
This year has seen the largest jumps in energy price cap increases. It started in February with an increase that would affect 22 million customers.
The average customer on a default rate paying by direct debit would see an increase from £693 to £1,971 from April 2022.
For a prepaid customer, an increase from £708 to £2,017 was to be expected.
On August 26, an announcement was made that the energy price cap would increase by £1,578 to £3,549 per year from October 1, 2022 for the average household by direct debit.
This is an 80% increase in payouts.
For the prepaid meter, the cap would increase from £1,591 to £3,608.
The shocking rise in the energy price cap sparked a government response after widespread demand for action.
On November 24, Chancellor Jeremy Hunt announced that the price cap would rise to $4,279 from January 2023 to reach all-time highs.
This means Ofgem has raised the price cap to 67p per unit for electricity and 17p for gas from January.
Experts at energy consultancy Auxilione estimate the new cap will cost the government around £15.1billion to subsidize energy companies’ household bills between January and March.