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Ofgem has announced plans to postpone the scheduled update of typical domestic consumption values (TDCVs) for gas and electricity consumers to assess the impact of the pandemic.
Every two years the regulator assesses domestic consumption and revises the TDCVs if the latest data results in materially different values. Ofgem calculates the typical low, medium and high TDCVs for gas and electricity using the two most recent years of the meter level data.
Since 2013 Ofgem said domestic consumption has been on a “consistent decreasing trend”. However, due to millions of people being forced to stay at home, early indications suggest there has likely been an increase since the first national lockdown in March 2020.
The regulator said a postponement of the update, which also includes the Economy 7 consumption split, will provide it with time to fully assess the impact Covid-19 has had on domestic consumption.
The previous TDCV update took place in April last year and the next update was due in April 2022.
The most recently available electricity data covers February 2018 to January 2020, prior to lockdown. Gas consumption data meanwhile is for mid-May 2018 to mid-May 2020, only covering the first few weeks of the initial lockdown. Ofgem expects the impact of this period on the annual average gas figures to be relatively small as the majority of gas consumption is during the winter period.
Consumption data which includes longer periods of lockdown (February 2020 to January 2021 for electricity and mid-May 2020 to mid-May 2021 for gas) will become available at the end of 2021.
Ofgem said the pandemic may have a lasting impact on consumers’ behaviours which could affect domestic consumption after its end. In order to assess whether the pandemic is a ‘one-off’ event or if it has structurally changed consumption, Ofgem may need post-lockdown consumption data.
In a letter to industry stakeholders Amy O’Mahoney, head of monitoring and evaluation, said: “We consider the delay appropriate given the exceptional circumstances and uncertainty around domestic consumption.
“We’re also aware of the administrative burden placed on industry when updating the TDCVs and want to ensure the values accurately represent ‘typical’ consumption before making this change.”
Ofgem aims to announce a final decision in June.
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