UK households may have to pay more for gas and electricity bills from April, energy regulator Ofgem says.
It is considering raising the price cap on household bills by £21 per year to help energy companies which have been hit by a rise in unpaid bills.
The current price cap is set at £1,042 per household for both gas and electricity. It runs to the end of March.
Households face £21 rise in energy bills in 2021 https://t.co/XDCVtmiL2I— BBC Business (@BBCBusiness) November 20, 2020
Consumers will learn in February what it plans to do.
The price cap was introduced in January 2019 and limits energy unit prices for about 11 million customers on more expensive variable tariffs.
These are often default tariffs that customers are moved to after a period on a lower fixed rate.
“Just like every other business, there have been challenges from the pandemic,” Emma Pinchbeck, chief executive of trade body Energy UK, said.
“It is the independent regulator’s job to hear views, look at the evidence, and weigh up how to support energy retailers through their own commercial difficulties in the pandemic, so that they can continue to supply and support all customers.”
The £21 rise to £1,063 is based on a household with typical usage and which pays for both electricity and gas by direct debit.
Price comparison website Uswitch says 12-month deals can be had for as little as £821.40 by comparison.
Cat Hobbs, the director of We Own It, which campaigns to nationalise energy supply, said: “These proposals from Ofgem are absolutely shocking. The idea that at a time when millions of people are struggling to pay their bills, the solution would be to charge people even more is farcical.”