Market Stabilisation Charge licence condition

Details of outcome

After considering responses to our consultation, we have decided to reintroduce the Market Stabilisation Charge (MSC) licence condition. This provides the option of implementing an MSC at pace if required at a later point. We consider that having this licence condition available helps to protect consumers’ interests in a period of high and volatile prices, by supporting market stability and investability.

This is not a decision to activate the MSC. If we were minded to activate the MSC at a later point in time, this would be the subject of a future consultation and decision.

Read the full outcome

Original consultation

Consultation description 

In a period of high and volatile prices, a sharp fall in wholesale prices can pose a risk to market stability. Suppliers can incur losses on energy which they have already bought to supply default tariff customers.

During the previous gas crisis we implemented a Market Stabilisation Charge (MSC) as a mitigation. This was a payment from a supplier who gained a customer to a supplier who lost a customer, to partially mitigate losses on energy purchases. We are now consulting on reintroducing the MSC licence condition, to provide the option of implementing an MSC at pace if required at a later point.

This consultation is not a process for considering whether or not to activate the MSC. If we were we minded to activate the MSC at a later point in time, this would be the subject of a future consultation and decision.

Who should respond

We welcome responses from interested stakeholders, particularly:

• domestic suppliers
• consumer groups and charities
• third party intermediaries