Utility Week poll shows price cap freeze favoured response to rising bills

Polling conducted across Utility Week’s social media channels indicates people are strongly in favour of freezing the energy price cap as a way of helping consumers this winter.

As part of our Tackling the Trilemma campaign which is being run ahead of Utility Week Forum this November, we asked what is the best way to mitigate the impacts of soaring energy bills this winter.

The poll received 95 votes in total across three options including freezing the cap, a social tariff or extending the Energy Bills Support Scheme (EBSS).

With almost 78% of total votes cast, the option of freezing the price cap was by far the most popular choice.

A price cap freeze covered by a deficit fund is an option that is heavily favoured by Scottish Power and the company’s chief executive Keith Anderson is one of the industry’s strongest advocates of this.

The move would freeze the cap at current levels at an estimated cost of around £100 billion over two years. This money would then be recouped from customers over a period of between 15-20 years, when prices have stabilised.

Extending the government’s Energy Bills Support Scheme (EBSS) was the second choice, with more than 13.5% voting in favour of giving consumers more money to help with soaring costs.

In May former chancellor Rishi Sunak revealed that the EBSS was being doubled to £400 and would be classed as a grant that does not have to be repaid.

Sunak further unveiled one-off payments of £650 to low-income households on certain benefits, £300 to some pensioners and £150 to people on disability benefits.

Along with the £150 council tax rebate provided in April, Sunak said low-income households would receive a total of at least £1,200, fully covering the price cap increase to £2,800 expected by Ofgem at the time. However, since then Ofgem has announced that the cap will increase by 80% on its current level to £3,549 per year for a typical dual fuel customer in October.

Current estimates forecast the cap will rise further still next year, with the most recent assessment that it will go above £6,600 in Q2 2023. As such, there have been calls from some in the sector to increase the EBSS to tackle the immediate bill hikes.

Introducing a social energy tariff for the most vulnerable customers was the least favoured option, with just under 8.5% voting for this solution.

At day one of Utility Week Forum Ofgem’s deputy director for price cap, Dan Norton, will be speaking about the recent changes made to the cap.

Specifically, Norton will discuss the options to ensure customers benefit from wholesale price changes more quickly in a fast-paced global market.

These include adopting a 3-month price review, protecting retail customers through regulatory mechanisms and outlining the key benefits to ECO4 and the Warm Home Discount.

To find out more about Utility Week Forum and to book your place, click here.