Decision on extending Short-Term Interventions and adjusting MSC calculation

Decision

Publication date

Industry sector

Supply and Retail Market

We consulted from 28 June 2022 to 18 July 2022 on extending the Market Stabilisation Charge (“MSC”) to 31 March 2023 and invited comments on extending the ban on acquisition-only tariffs (“BAT”) to the same date. We also consulted on changes to the MSC calculation methodology to reflect our announcement of 16 May 2022 relating to price indexation in the default tariff cap (the “Second Indexation Guidance Letter”).

This document describes our decision to proceed with all the above changes. We have taken into account the responses received to the consultation and have considered them in the light of how to best protect consumers’ interests.

Due to ongoing high gas and electricity prices, short term interventions are still required to protect the interests of consumers as they were initially intended.

This document also invites comments from stakeholders on what action, if any, Ofgem should take in relation to the period after 31 March 2023, when the current licence conditions for the MSC and BAT end.
Please send initial views and any evidence by Monday 19 September 2022 to retailpolicyinterventions@ofgem.gov.uk, with any follow-up information in the following two weeks.

To reflect our decision to implement our price indexation proposals which are aligned to the decision on changes to the wholesale methodology published on 4 August 2022, we also include alongside this decision an updated MSC Guidance document which comes into force on 7 September 2022. In the interests of transparency, we have also published an updated MSC worked example for cap period 9a which reflects the changes made as part of this decision.