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Ofgem Planning Action to Cushion Energy Firms From Wholesale Price Swings
The proposal would revive a charge that compensates suppliers after customer switching and would not automatically raise bills, Ofgem said.
- On Friday, the British energy regulator Ofgem launched a consultation on reintroducing its market stabilisation charge to protect suppliers from wholesale price volatility amid the ongoing Iran conflict.
- This mechanism previously operated from April 2022 through March 2024, established during the Russia-Ukraine war to shield suppliers from market shocks and price volatility.
- Under the proposed mechanism, a gaining supplier compensates the former provider if customers switch during sharp wholesale price drops. Ofgem stressed activating the charge would not automatically increase consumer bills.
- MoneySavingExpert founder Martin Lewis warned the measure acts as a "form of switching penalty," arguing the stable supplier market means the charge protects firm profits while dampening competition.
- With energy bills having risen 4% on October 1, households face mounting pressure as forecasters warn costs could surge by nearly £300 from January amid persistent market volatility.
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UK watchdog moves to protect energy market from wholesale price swings
·London, United Kingdom
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Evening Standard+4 Reposted by 4 other sources
Ofgem planning action to cushion energy firms from wholesale price swings
The watchdog said it is looking at re-activating its market stabilisation charge, which was first put in place after Russia’s invasion of Ukraine.
·London, United Kingdom
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Total News Sources13
Leaning Left2Leaning Right1Center6Last UpdatedBias Distribution67% Center
Bias Distribution
- 67% of the sources are Center
67% Center
L 22%
C 67%
11%
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