‘No energy bill price cap this winter’ says Ofgem

Ofgem has just announced that a price cap on energy bills proposed by the Prime Minister last week is unlikely to take effect before Winter (click here). But last week Business Secretary, Greg Clark, claimed it could be in place by Winter (click here).

John Penrose MP said:

“The Prime Minister was absolutely right to re-affirm our promise to protect households from rip-off energy bills in her conference speech last week. 

“But 17 million households shouldn’t have to wait up to two years for the cavalry to arrive. We need faster routes to deliver our pledge. 

“We should look at using secondary legislation to get this through Parliament quickly and end the rip-off before the cold Winter months start to bite. 213 cross-party MPs and most of the ‘challenger’ energy firms are supporting a temporary, relative price cap and will have no objection to this being sped through Parliament.”

On 13th September, John Penrose wrote to the Business Secretary to ask why Section 26 of the Energy Act 2010 is not being considered instead of a much slower, full-scale Bill.  Section 26 allows Ministers to introduce a cap through a statutory instrument if ‘some customers of an energy supplier are treated less favourably than other customers of the energy supplier as respects charges for energy.’

Using this existing legal power, Mr Penrose argued, ‘will ensure that an energy price cap is passed into law without further, unnecessary delays which only make our constituents poorer.

Notes:

*On 13th September 2017, John Penrose MP wrote the following letter to Greg Clark:

“I was delighted to hear you stand up so robustly for consumers yesterday during BEIS Questions.  As you said, it is essential that Ofgem uses the powers that Parliament has given it to eradicate the £1.4bn consumer detriment.  The ball is firmly in Ofgem’s court and they must start doing the job of standing up for consumers – not least because all three major parties promised in their manifestos to cap energy bills for 17 million Standard Variable Tariff (SVT) energy consumers.

“If Ofgem are still unwilling to stick up for energy customers, we may have to consider using the powers in Section 26 of the Energy Act 2010 to make regulatory changes if ‘some customers of an energy supplier are treated less favourably than other customers of the energy supplier as respects charges for energy.’ This would have the advantage of using secondary legislation, rather than a primary Act of Parliament.

“As we discussed in the House of Commons yesterday, Ofgem has taken the position of asking the Government to pass a law ordering them to impose an energy price cap when Parliament has already given them the legal powers to do it.  By using the regulatory powers under the Energy Act, we will ensure that an energy price cap is passed into law without further, unnecessary delays which only make our constituents poorer.

“Can you confirm that these powers could be applied in this case and if Ofgem continues to refuse to use its powers, will you give urgent consideration to my case (submitted in April 2017 to the Industrial Strategy Green Paper consultation, entitled Creating ‘OfNet’) for replacing Ofgem completely with a new, heavyweight, cross sector regulator that isn’t scared to do its job.”

*John Penrose: Is it time to scrap Ofgem?, Prospect Magazine Article, 5th September, link.

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