Prepayment price cap – letter to suppliers

Publication date
19th December 2016
Information types
Policy areas

From 1 April 2017 the amount suppliers can charge a domestic prepayment customer will be subject to a transitional cap – the Prepayment Charge Restriction (or prepayment price cap). The cap is brought into effect by the Competition and Markets Authority’s (CMA) Energy Market Investigation (Prepayment Charge Restriction) Order 2016, available on the CMA’s website.

Ofgem will be responsible for administering the cap. This letter summarises the key dates leading up to the first charge restriction period in April 2017, and confirms suppliers’ obligations in relation to providing assumed consumption splits and sending any price increase notifications to prepayment customers. It also describes our plan to carry out a trial-run of the process of updating the price cap in January. We are asking that any supplier interested in participating in this trial-run contact us by Friday 6 January 2017.

Alongside the letter, we have also published an updated draft of the reporting template that suppliers must submit at the beginning of each Charge Restriction Period. We would be grateful for any comments on this template by Tuesday 7 February 2017.

Responses and questions with regard to this letter and all matters relating to our administration of the price cap should be sent to the dedicated prepayment price cap mailbox, PPM.PriceCap@ofgem.gov.uk.