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’).
- 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:
The price protection for WHD customers was a temporary measure until the default tariff cap came into effect. As promised previously, we are proposing to move WHD customers onto the default tariff cap protection.
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