Energy bills are projected to decrease slightly in January, but experts caution that they may go up again in the spring. Analysts from Cornwall Insight anticipate a drop in the Ofgem energy price cap from £1,755 annually to £1,733 for typical households paying by direct debit, representing a £22 reduction. Ofgem is set to announce the January price cap this Friday, attributing the expected decrease to a slight decline in wholesale energy prices. However, Cornwall Insight foresees a potential £75 per year increase in the price cap come April.
Craig Lowrey, a principal consultant at Cornwall Insight, noted that while the January price cap dip may seem positive, it is only a partial view. He highlighted that bills remain significantly higher than pre-crisis levels and are poised to climb again in April, with the upcoming rise not driven by higher wholesale prices.
The anticipated April increase is primarily linked to escalating charges related to the operation and maintenance of the nation’s energy networks, specifically electricity transmission and gas distribution charges. Lowrey emphasized that transitioning to renewables will offer long-term stability and energy independence but comes with real upfront costs that are now reflected in bills. Balancing short-term affordability with long-term resilience is crucial, alongside ensuring that people understand the significance of this trade-off.
The price cap does not restrict the total energy payment but rather limits the unit rates of gas and electricity, along with standing charges. Standing charges are fees for grid connection. Ofgem recently urged nearly two million households to check if they are eligible to claim back £240 million in unused energy credit. The energy regulator disclosed that closed energy accounts, totaling 1.9 million, still hold unclaimed funds, especially for households that have relocated in the last five years without their previous supplier’s contact.
Ofgem estimates that individuals could reclaim over £100 or just a few pounds. Energy suppliers are obligated to issue final bills within six weeks of an account closure and refund within ten working days. Over 90% of closed account balances are automatically returned, but if you suspect being owed money, it is advisable to review final bills and contact the former supplier.
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