Default Tariff Cap - information for suppliers

The Default Tariff Cap came into force on 1 January 2019. The cap is temporary, and applies to tariffs for all customers on standard variable and default energy tariffs. In August 2020, Ofgem announced that the Default Tariff Cap would continue to protect default prepayment meter customers after the CMA Prepayment Meter Price Cap expires at the end of 2020. Suppliers can price to the level or below the cap, but cannot charge more.

When is the Default Tariff Cap updated?

Ofgem adjusts the level of the cap twice a year - in February and August to apply in April and October respectively - to reflect the estimated costs of supplying electricity and gas to homes in the next six-month summer or winter period. 

The next price cap period begins on 1 April 2021.

Industry guidance on applying the Default Tariff Cap 

When will the Default Tariff Cap end?

The cap will be in place until at least the end of 2020. The government will decide whether to extend the cap beyond this, up to a maximum of 2023. 

We will continue to monitor the energy market closely while the default tariff cap is in place and produce an annual report on the competitiveness of the energy market.

Background

Further publications and outputs relating to the development of the cap can be found in the publications feed below.

Need help?

If you have technical or policy questions about the cap, please contact us at retailpriceregulation@ofgem.gov.uk

If you are an energy customer looking to find out your capped tariff price, please contact your energy supplier. You can find their contact information on an energy bill, or see Who is my energy supplier? You can also find answers to frequently asked questions on our consumer FAQ page, or see our energy price caps guide

Publications and updates

  • Published: 25th Nov 2020
  • Closed: 4th Jan 2021
  • Consultations and responses
  • 4 Associated documents
This letter outlines our proposed changes to the models set out in Annex 3 to SLC 28AD. This annex calculates the network cost allowance of the default tariff cap.

  • Published: 25th Nov 2020
  • Closed: 4th Jan 2021
  • Consultations and responses
  • 2 Associated documents
This letter outlines our proposed changes to the ‘Annex 4 – policy cost allowance methodology’ to SLC 28AD

  • Published: 25th Nov 2020
  • Closed: 4th Jan 2021
  • Consultations and responses
  • 2 Associated documents
This letter outlines our proposal for a new methodology for calculating the Feed-in Tariff (FIT) allowance from cap period 6 onwards. We have proposed to pass through FIT scheme costs on a lagged basis.

  • Published: 20th Nov 2020
  • Closed: 21st Dec 2020
  • Consultations and responses
  • 2 Associated documents
This consultation sets out our proposals on adjusting the default tariff cap to allow for the recovery of additional debt-related costs as a result of the COVID-19 pandemic that are not allowed for through the existing cap methodology.

  • Published: 20th Nov 2020
  • Closed: 21st Dec 2020
  • Consultations and responses
  • 1 Associated documents
This working paper is the start of the consultation process setting out how we propose to set a PPM specific non-pass-through the SMNCC methodology.

  • Published: 20th Nov 2020
  • Closed: 21st Dec 2020
  • Consultations and responses
  • 1 Associated documents
This working paper is the start of the consultation process for updating the smart metering allowance in the default tariff cap in time for winter 2021-22.

  • Published: 14th Sep 2020
  • Closed: 12th Oct 2020
  • Consultations and responses
  • 11 Associated documents
This policy consultation covers our initial thinking on how COVID-19 might have impacted suppliers’ costs and whether we should adjust the default tariff cap.

  • Published: 7th Aug 2020
  • Open letters and correspondence
  • 10 Associated documents
Default tariff cap level: 1 October 2020 to 31 March 2021

  • Published: 5th Aug 2020
  • Decisions
  • 6 Associated documents
Our decision setting out how we have decided to protect consumers with a prepayment meter after the PPM cap expires.

  • Published: 5th Aug 2020
  • Decisions
  • 2 Associated documents
Our decision on adjusting the non-pass-through Smart Metering New Cost Change (SMNCC) allowance in the default tariff cap, which accounts for the net impact of the smart meter rollout on suppliers’ efficient operating costs.

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