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 expired 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?

Ofgem 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. This annual report will include a recommendation to government on whether they should end or extend the price cap at the end of the year. The government will decide whether to extend the cap for a year. The cap cannot be extended beyond the end of 2023.

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: 31st Jan 2020
  • Closed: 2nd Mar 2020
  • Consultations and responses
  • 8 Associated documents
This consultation sets out our approach and initial thinking on several of the analytical challenges involved in reassessing the wholesale allowance in the first default tariff cap period.

  • Published: 31st Jan 2020
  • Open letters and correspondence
  • 1 Associated documents
This paper updates stakeholders on our plans for updating the non-pass through Smart Metering Net Cost Change (SMNCC) allowance in the default tariff cap.

  • Published: 31st Jan 2020
  • Open letters and correspondence
  • 1 Associated documents
This paper updates stakeholders on our plans for consulting this year on proposals to modify to the default tariff cap.

  • Published: 23rd Jan 2020
  • Closed: 24th Feb 2020
  • Consultations and responses
  • 9 Associated documents
A statutory consultation covering our proposal to change the default tariff modification process to align the provisions of the licence and the 56 day period as required by the Act.

  • Published: 12th Dec 2019
  • Open letters and correspondence
  • 1 Associated documents
The decision on the non-pass through Smart Metering Net Cost Change (SMNCC) allowance in the Default Tariff Cap for Cap period four (April to September 2020)

  • Published: 22nd Oct 2019
  • Closed: 19th Nov 2019
  • Consultations and responses
  • 11 Associated documents
The consultation for reviewing smart metering costs in the default tariff cap.

  • Published: 11th Oct 2019
  • Open letters and correspondence
  • 5 Associated documents
The undertakings relating to disclosure of the proposed new SMNCC model and supporting data as part of our statutory consultation on reviewing smart metering costs in the default tariff cap.

  • Published: 3rd Sep 2019
  • Open letters and correspondence
  • 12 Associated documents
A response paper setting out our approach for providing sufficient transparency to stakeholders of our review of the allowance for smart metering costs in the default tariff cap.

  • Published: 22nd Aug 2019
  • Open letters and correspondence
  • 9 Associated documents
A response paper covering our thoughts on having regard to advanced or lagged SMNCC payments in the first three cap periods.

  • Published: 16th Aug 2019
  • Open letters and correspondence
  • 15 Associated documents
An update on our approach, timelines, and data gathering arrangements for our review of smart metering costs and the allowance in the default tariff cap.

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