Government's default tariff cap and Ofgem's broader vulnerable safeguard tariff

On 19th July, the Domestic Gas and Electricity (Tariff Cap) Act 2018 came into force. This legislation requires the introduction of a temporary tariff cap for customers on Standard Variable (SVT) and default tariffs (the ‘default tariff cap’). 

The legislation:

  • creates a new duty for Ofgem to design and implement the default tariff cap
  • places a duty on Ofgem to implement the price cap as soon as practical. 

We are committed to protecting energy customers, and we are working to implement the default tariff cap as soon as possible. We are currently consulting on our proposals for setting and updating the default tariff cap, alongside the draft modifications to the Electricity and Gas Standard Licence Conditions.

When can customers benefit?

We are consulting on our proposals for implementation of the default tariff cap and are aiming for the price cap to be in place by the end of the year.

Our analysis estimates that 96% of SVT customers could see reductions in their bills once the default tariff cap is in effect.

If we do proceed with our proposals, suppliers will be required to inform customers of the associated changes in terms to their contracts.

Existing price protections

We have provided temporary price protection for 5 million vulnerable consumers, following our extension in February 2018 of the prepayment safeguard tariff to cover 1 million vulnerable consumers in receipt of the Warm Home Discount. You can find further information at:

Next steps

We have proposed a design for how the default tariff cap should be set and updated. This design is the result of a consultation process we started in March 2018. We have published our statutory consultation which outlines our proposals for the design and the required licence modifications and statutory notice. All associated working papers, consultations and publications are published on this page. 

If you have questions, please contact us at Retailpriceregulation@ofgem.gov.uk

Publications and updates

  • Published: 17th Sep 2018
  • Open letters and correspondence
  • 4 Associated documents
Ofgem is running a Disclsoure Room as part of our Statutory Consultation on the Default Tariff Cap. The attached documents detail the process for access.

  • Published: 6th Sep 2018
  • Closing: 8th Oct 2018
  • Consultations and responses
  • 23 Associated documents
A statutory consultation setting out our proposals on the methodology to implement a Default Tariff Cap and the associated Licence Conditions.

  • Published: 29th Aug 2018
  • Open letters and correspondence
  • 1 Associated documents
Default Tariff Cap: Further information statutory consultation and notice of intent to open a Disclosure Room to allow review of data underlying the cap

  • Published: 16th Aug 2018
  • Open letters and correspondence
  • 1 Associated documents
This letter gives an update on the timetable for our statutory consultation on the government’s default tariff cap, and the associated licence conditions.

  • Published: 20th Jul 2018
  • Decisions, Open letters and correspondence
  • 1 Associated documents
This letter provides an update on our timetable for the default tariff cap and sets out our decision not to proceed with the vulnerable safeguard tariff.

  • Published: 15th Jun 2018
  • Agendas, minutes and presentations, News and blogs
  • 0 Associated documents
Ofgem is seeking feedback from smaller suppliers on developing a design for price protection for consumers on standard variable and default tariffs.

  • Published: 15th Jun 2018
  • Closed: 29th Jun 2018
  • Consultations and responses
  • 8 Associated documents
An early sight of the draft licence conditions for how we may implement the default tariff cap and separate documents providing an initial view of the annexes.

  • Published: 7th Jun 2018
  • Agendas, minutes and presentations, News and blogs
  • 0 Associated documents
Join us at Ofgem's default tariff cap workshops on Tuesday 12 and Wednesday 13 June 2018.

  • Published: 25th May 2018
  • Closed: 25th Jun 2018
  • Consultations and responses
  • 43 Associated documents
This consultation outlines our proposals for how we may design and implement the default tariff cap. This follows publication of five working papers.

  • Published: 19th Apr 2018
  • Open letters and correspondence
  • 11 Associated documents
This is the fourth working paper relating to the default tariff cap. It discusses environmental and social obligations costs under the default tariff cap.

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