Energy bills are anticipated to see a slight decrease in January, but experts caution that they may rebound in the spring. Analysts from Cornwall Insight project that Ofgem’s energy price cap could drop from £1,755 annually for a typical household paying by direct debit to £1,733, marking a £22 reduction.
The announcement of Ofgem’s January price cap adjustment is expected this Friday. The projected decline is attributed to a minor dip in wholesale energy prices. However, Cornwall Insight foresees a potential increase of approximately £75 per year in April.
Craig Lowrey, a principal consultant at Cornwall Insight, noted that while the January price cap decrease may appear positive, it is only a partial view. He highlighted that current bills remain significantly higher than pre-crisis levels and are set to rise again in April due to factors beyond higher wholesale prices.
The anticipated April price hike is primarily linked to escalating charges related to maintaining the country’s energy networks, specifically electricity transmission and gas distribution expenses. Lowrey emphasized that transitioning to renewable energy sources will offer long-term stability and independence but comes with real upfront costs impacting current bills. Balancing short-term affordability with long-term resilience is crucial, along with ensuring that consumers understand the importance of this trade-off.
The price cap does not restrict the total energy bill but imposes a limit on the rates for gas and electricity units, including standing charges. Standing charges represent fees for grid connections. Ofgem recently urged nearly two million households to check if they are eligible to claim £240 million in unclaimed energy credit, with many closed energy accounts still holding funds.
Energy suppliers are obligated to issue final bills within six weeks of an account closure and refund any remaining credit within ten working days. While over 90% of closed account balances are automatically returned, individuals who suspect they are owed money should review correspondence from previous suppliers.
By utilizing cookies and other identifiers, Reach and its partners collect information to enhance site experience, analyze usage patterns, and display personalized ads. Opt-out options are available to control data sharing preferences, with acceptance of cookie usage and consent to stated practices indicated by accessing the website and services provided.