Aug 7 (Reuters) - Britain’s energy regulator told suppliers on Wednesday to lower their price cap for average annual consumption by 75 pounds ($91.21) to 1,179 pounds from Oct. 1, following a drop in wholesale power and gas prices this year.
Energy regulator Ofgem in February approved an increase in bills by more than 10% to 1,254 pounds from April 1, after several of the country’s biggest suppliers, a group known as the “Big Six”, complained that the cap was initially set too low.
"Wholesale energy prices have significantly fallen between February and June 2019. A combination of low demand during the winter, strong gas supply and relatively healthy storage levels have pushed down wholesale prices," Ofgem said here in a statement.
Ofgem was tasked by parliament last year with setting a limit after lawmakers said customers were being overcharged for electricity and gas.
Ofgem, which reviews the price cap every six months, had said then that it needed to allow suppliers to charge more as wholesale energy contracts, used to help formulate the cap level, were higher than during the last cap period.
Ofgem calculates the cap using a formula that includes wholesale gas prices, energy suppliers network costs and costs of government policies, such as renewable power subsidies.
Britain’s big six energy suppliers are Centrica’s British Gas, SSE, Iberdrola’s Scottish Power, Innogy’s npower, E.ON and EDF Energy. ($1 = 0.8223 pounds) (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Anil D’Silva)