From 1 April 2017 the amount of money suppliers can charge a domestic prepayment meter (PPM) customer will be subject to a transitional cap: the Prepayment Charge Restriction (or prepayment price cap).
The price cap is one of the remedies introduced following the Competition and Markets Authority’s (CMA) investigation into the energy markets.
The price cap is temporary, and is due to expire at the end of 2020 when the smart meter rollout is expected to be complete. It covers all domestic prepayment customers, except those with a fully interoperable smart meter.
Ofgem is responsible for administering the cap. The level of the cap will be updated on 1 April and 1 October each year.
At the beginning of every February and August we will publish the details of the cap for the forthcoming charge restriction period. Separate levels of the caps are published for each region and meter type, calculated using a methodology designed by the CMA.
Suppliers are required to ensure that their charges to prepayment customers do not exceed the level of the cap.