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industry & government news

OFGEM ADVISED TO EXTEND ENERGY

PRICE CAP FOR PREPAYMENT

CUSTOMERS BEYOND 2020

IT IS FEARED THE CAP COULD DRIVE AWAY SMALL SUPPLIERS

OFGEM HAS BEEN ADVISED to extend by then the rollout of smart meters, more up-to-date and detailed data than
beyond 2020 the cap on energy prices replacing prepayment meters, would what was available to the CMA in 2016.
for people who pay for their energy be complete and increased competition As a result, the cap will be increased
upfront. The cap will also be raised, would lead to lower prices. from 1 October, with prepayment
according to The Independent. But following a review, the CMA customers paying roughly £1 a week
The Competition and Markets said: “It now recommends that Ofgem more based on current prices.
Authority (CMA) introduced the cap should continue to protect prepayment “A price cap set too low may lead to
on gas and electricity prices in 2016 customers once the CMA’s cap expires, suppliers leaving the market, reducing
to protect customers on prepayment given that the full rollout of smart meters both competition and consumer choice.
meters as they are not able to switch will not have completed by 2020.” Even with the revised level of the price
suppliers as easily as other customers. The regulator did not say how long cap, prepayment customers will still
The cap was due to be lifted at the the extension should be. be protected from unnecessarily high
end of 2020, as the CMA expected that The cap will also be reset based on prices,” the CMA said.

SMICoP requires that an It added: “We also expect to see
independent company surveys improvements in the quality of data
a sample of customers on their through the introduction of additional
installation experience. scrutiny. Publication of this data is in
Ofgem expects the publication of keeping with the Energy Data Taskforce
the customer survey results will make recommendations and general
suppliers more accountable for their direction of travel towards increased
actions and decisions and lead to an data transparency.”
overall improved consumer experience It expects the customer survey results
during the installation process. to be published from early 2020.

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News.indd 4 15/08/2019 16:06