Energy UK responds to Ofgem's price cap announcement
Responding to Ofgem’s announcement that it is raising the level of the default price cap by £117 for an average household, Energy UK’s chief executive Lawrence Slade said:
“Nobody takes the decision to increase prices lightly, but Ofgem’s announcement today underlines the fact that suppliers, of all sizes, are facing drastically rising costs – including a 17% increase in wholesale costs since the last cap period - the vast majority of which are outside their direct control.
“We are seeing a number of suppliers exiting the market due to these rises, which in turn places additional costs on all other suppliers. Ofgem need to ensure that the cap allows for these mutualised costs to be appropriately recovered, otherwise it is to the detriment of all customers.
“In the meantime, the energy sector is doing all it can to keep costs down for customers - including through the transition to a smarter, more flexible, low carbon energy system. However, the most efficient way to keep costs down in the long term is through the more efficient use of energy - which the Committee for Climate Change has shown has saved households £290 per year since 2008. We therefore continue to call for the Government to introduce a national energy efficiency programme.”
Note to Editors: Ofgem’s breakdown of a typical bill shows that almost 80% results from costs outside of suppliers’ direct control with the remainder accounted for by operating costs and profits.