Energy bills are anticipated to decrease slightly in January, with a potential rise expected in the spring, caution experts. According to analysts at Cornwall Insight, the Ofgem energy price cap is projected to drop from £1,755 annually for the average household paying via direct debit to £1,733, marking a £22 reduction. Ofgem is set to reveal the January price cap this Friday, attributing the anticipated decline to a minor decrease in wholesale energy prices. However, Cornwall Insight forecasts a potential increase of approximately £75 annually come April.
Craig Lowrey, principal consultant at Cornwall Insight, emphasized that while the January price cap dip may seem positive, it is only a partial view. Lowrey noted that bills remain considerably higher than pre-crisis levels, and a surge is expected in April, driven not by higher wholesale prices but by escalating charges related to the operation and maintenance of the country’s energy networks, particularly electricity transmission and gas distribution charges.
The forthcoming April rise is mainly due to escalating costs associated with maintaining the nation’s energy networks, specifically electricity transmission and gas distribution charges, as stated by Cornwall Insight. Lowrey highlighted that transitioning to renewables will bring about long-term stability and energy independence, albeit at a cost that is reflected in current bills. Balancing short-term affordability with long-term resilience is a crucial challenge, ensuring that the trade-off is understood by consumers.
The price cap does not restrict the total energy expenditure but sets a limit on the rates for gas and electricity units, along with standing charges. Standing charges are fees for grid connection. Ofgem recently urged nearly two million households to verify potential claims totaling £240 million in unclaimed energy credit, stemming from closed energy accounts where refunds have not been processed. Ofgem estimates that some individuals might be entitled to over £100, while others may only receive a small refund, with energy suppliers mandated to issue final bills within six weeks of account closure and refunds within ten working days.
Over 90% of closed account balances are automatically refunded. Individuals suspecting owed funds should inspect final bills in letters and emails and reach out to their former supplier.
