Energy watchdog says Government must regulate to cap household bills

Posted On: 
17th August 2017

The head of energy regulator Ofgem has said the Government must bring forward new legislation if it wants to cap household energy bills. 

Ofgem's Dermot Nolan said ministers would need to legislate to cap bills

Some consumers have been hit by rises as large as 15% this year, although British Gas has blamed some of the increases on policy costs such as subsidising renewable energy and installing digital smart meters.

The watchdog has so far proposed only a "safeguard tariff", aimed at protecting 2.2m of the most vulnerable customers from rising bills. 

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Ofgem's chief executive Dermot Nolan told the Financial Times that any sweeping intervention in the energy market was not in his remit and would be a "policy matter for government". 

That contradicts a claim from Business Secretary Greg Clark, who wrote to Mr Nolan earlier this year saying that Ofgem "has powers available" to correct problems in the market. 
Mr Nolan said a new law would be the "most effective way" of capping prices, and added that the regulator "would absolutely do our best to implement such a cap as effectively and efficiently as possible".

He warned that trying to cap prices under the current rules would leave a "substantive appeal route" for the energy companies. 

At the same time Mr Nolan said he was worried about the impact on consumers of rising bills.

“I see a situation where wholesale costs . . . are much the same as three years ago and I’m concerned about some of the price rises we’ve seen this year,” he said.