LONDON (Reuters) - Britain’s energy regulator has called for comments from gas and electricity suppliers and consumers on plans to impose price caps on certain tariffs.
Ofgem says the consultation is on how it should set the price caps, how frequently to modify them and by what criteria it should judge whether they should be lifted.
The price caps on so-called standard variable rates were proposed by the government and will be implemented by the end of this year.
There about 12 million households on such tariffs, Ofgem has said, paying as much as 300 pounds more on their annual bills.
Ofgem says, in establishing a price cap, it will look at four methodologies of establishing suppliers’ costs. It will then assess whether an additional “headroom” is needed above the cost base to take into account uncertainties and risks.
The price cap is due to be lifted in 2020 but the government can extend its duration by 12 months on three occasions.
Those wishing to participate in the consultation have until June 25 to reply.
Some of Britain’s biggest energy companies have announced price increases this year, citing higher wholesale prices and the cost of government policies to support renewable energy generation.
Reporting by Sabina Zawadzki; Editing by David Goodman