Default tariff cap

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. Suppliers can price to the level or below the cap, but cannot charge more.

A separate price cap applies to customers on prepayment meter tariffs.

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 October 2019.

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: 3rd Sep 2019
  • Open letters and correspondence
  • 6 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
  • 2 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
  • 3 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.

  • Published: 7th Aug 2019
  • Open letters and correspondence
  • 9 Associated documents
Updated levels of the Default Tariff Cap and associated documents for the third charge restriction period (1 October 2019 – 31 March 2020).

  • Published: 7th Aug 2019
  • Decisions
  • 1 Associated documents
Decision for our approach to setting the smart metering (SMNCC) allowance and Capacity Market allowance for the third cap period of the default tariff cap.

  • Published: 18th Jun 2019
  • Closed: 16th Jul 2019
  • Consultations and responses
  • 8 Associated documents
A consultation on our approach to the smart metering and Capacity Market allowances for the third period of the default tariff cap.

  • Published: 29th Mar 2019
  • Guidance
  • 1 Associated documents
This document provides guidance for industry on the publicly available inputs and sources used for calculating default energy tariff cap models.

  • Published: 14th Mar 2019
  • Open letters and correspondence
  • 1 Associated documents
This letter outlines our plans for reviewing smart metering costs to set the Smart Metering Net Cost Component in future default tariff cap periods.

  • Published: 7th Feb 2019
  • Open letters and correspondence
  • 10 Associated documents
Updated levels of the Default Tariff Cap and associated documents for the second charge restriction period (1 April 2019 – 30 September 2019).

  • Published: 15th Jan 2019
  • Open letters and correspondence
  • 15 Associated documents
This letter outlines our approach to the capacity market calculations in the default tariff cap for the next price cap periods.

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