Ofgem threatened with legal action over energy price cap rise

From the Good Law Project:

Ofgem, the energy regulator, sets the level at which the cost of energy is capped. When it does this, it has a duty to protect consumers, particularly those who are vulnerable.

In our analysis, that means it has to conduct a proper impact assessment before implementing changes to the price cap. Having done so, it has the power to ease the pressure of mounting bills on vulnerable consumers who are likely to be most affected by imposing a separate, lower cap for them, sometimes called a ‘social tariff’.

But, on 26 August, Ofgem is set to announce yet another energy price cap hike, which will come into effect on 1 October. This will raise the average household bill to a predicted £3,582, marking a 180 per cent increase from this time last year. In doing so, it seems to have barely considered the impact its decision will have, let alone any steps it could take to mitigate it.

In July, we wrote to Ofgem, expressing our concerns about its decision-making. We asked it to provide proof of its impact assessments. We got a three-line reply, which did nothing to ease our concerns.

That is why we, along with Fuel Poverty Action and Dion Alexander, the Chair of the Highlands & Islands Housing Associations Affordable Warmth Group, have written to Ofgem demanding it does more to protect vulnerable people and off-grid communities.

We are now calling on Ofgem to commit to carrying out proper impact assessments, and to consider appropriate mitigation measures, before raising the energy price cap any further.

More info: https://goodlawproject.org/news/ofgem-court-action-vulnerable-people

Update from Good Law Project today after Ofgem announced price cap increase from October -

‘In July, we wrote to Ofgem to express our concern about its decision-making. We asked it to provide proof of its impact assessments. It failed to produce any such evidence. So last week we put the regulator on notice of formal legal action if it failed to uphold its duties.

A formal response to the letter is expected today, but today’s announcement provides no indication that an impact assessment has been carried out.’

More info - https://goodlawproject.org/news/sue-ofgem-price-cap-failure/

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