Energy price cap for vulnerable consumers considered by Ofgem
The energy regulator is considering introducing a price cap on bills as part of new proposals aimed at protecting vulnerable consumers.
Ofgem said on Monday that a "safeguard tariff" for vulnerable consumers, which would protect them from overpaying for their energy, is one of a number of options it is mulling.
It said research it carried out with the Competition and Markets Authority points to these customers getting a "poor deal".
It comes after a temporary price cap to protect more than four million households who prepay for their energy came into effect in March.
Ofgem said that cap would save typical prepayment customers about £80 a year but it could now be extended with the safeguard tariff expected to benefit over 2.6 million households that receive the warm home discount.
Dermot Nolan, chief executive of Ofgem, said: "Protecting vulnerable consumers is a priority for Ofgem.
"We are committed to ensuring that the more disadvantaged in society are not left behind as we move towards a smarter, more competitive energy market.
"That's why we are starting new work to protect vulnerable customers, including the option of introducing a safeguard tariff for them."
Among its other proposals are plans to make switching easier and to cap warrant charges to install pre-payment meters, and ban these charges altogether for the most vulnerable.
Ofgem said it wants to take "the hassle out of switching" after its data showed many people have never or rarely switched.
"Suppliers must also do more to get all their consumers, particularly those on poor value standard variable tariffs, a better deal.
"We are pressing ahead with a raft of reforms to make it even easier for people to switch no matter how they choose to shop around," Mr Nolan added.
The Conservatives promised a wider price cap that would benefit 17 million customers before the general election but, following Theresa May's failure to win a majority, the policy did not appear in the Queen's Speech.
Ahmed Farman, analyst at Jefferies, said it was "increasingly clear" an industry-wide price cap for energy bills is unlikely.
Labour MP and former shadow energy secretary Caroline Flint said: "Today's announcement doesn't even begin to fix our broken energy market.
"It is not just vulnerable customers on the poorest-value tariffs, it is 17 million customers being ripped off to the tune of around £2 billion a year."
SSE, EDF, ScottishPower, Npower and E.On have all ramped up prices over the past few months as customers already struggling with soaring Brexit-fuelled inflation are hammered further.
The Prime Minister's official spokesman said: "Ofgem's response is a step in the right direction.
"We've said we need a better energy market and are committed to extending price protection currently in place to some vulnerable energy consumers to more people on the poorest-value tariffs.
"We are not ruling anything out, whether that is action by the regulator or legislation."