The energy price cap is exptected to surge from £1,971 to £2,800 a year in October, the boss of Ofgem has told MPs.
The energy regulator’s chief exective Jonathan Brearley told the the Business, Energy and Industrial Strategy Committee he expects the cap to be “in the region of £2,800”, hitting households already struggling with a cost-of-living crisis.
It came as former Ofgem chief executive Dermot Nolan said that the regulator could have stopped some of the sector’s failures “if we had moved faster”.
Mr Nolan, who led Ofgem between 2014 and 2020, told committee that he did not believe any regulatory regime could have prevented large numbers of energy firms failing in the wake of unprecedented rises in gas and electricity prices.
He described fivefold increases in wholesale energy costs as a “once in a 100-year event” and argued that Ofgem had followed requests from government to prioritise competition over regulatory supervision because of the “Big Six” firms’ dominance of the market.
The regulator has been heavily criticised for allowing too many firms to set up with minimal checks on whether they had the required skills, or were financially resilient enough to survive big price swings.
Mr Nolan said from around 2015 “many” new firms entered the market under a “permissive” regime “encouraged by government but also a conscious decision of the Ofgem board”.
However it became apparent from 2017/18 that “in certain cases firms had entered the market in a speculative manner that that was probably not reasonable, not fair and we needed to do something about it”.
Mr Nolan said: “I don’t think any regime would have been entirely fit for purpose, but I do accept that if we have moved faster we would have stopped some of the failures that have happened.”
Source Link Energy price cap will surge to £2,800 in October, Ofgem boss to tell Sunak