Energy bills are anticipated to decrease slightly in January, followed by a potential increase in spring, according to experts. Analysts at Cornwall Insight project that the Ofgem energy price cap for typical households paying by direct debit will drop from £1,755 to £1,733, a £22 reduction. This forecasted decline is attributed to a slight decrease in wholesale energy prices. However, Cornwall Insight expects the price cap to potentially rise by approximately £75 yearly in April.
Craig Lowrey, principal consultant at Cornwall Insight, emphasized that while the January price cap dip may seem positive, overall bills still remain significantly higher than pre-crisis levels and are expected to climb once more in April. The anticipated April increase is primarily due to escalating charges related to maintaining the country’s energy networks, specifically electricity transmission and gas distribution charges.
Lowrey further highlighted that while transitioning to renewable energy sources will bring long-term stability and energy independence, it comes with upfront costs that are currently reflected in bills. Balancing short-term affordability with long-term resilience is crucial, along with ensuring that consumers understand the reasons behind this trade-off.
The price cap does not impose a limit on total energy expenditures but rather restricts the unit rates of gas and electricity, including standing charges. Standing charges represent fees for grid connection. Ofgem recently urged nearly two million households to check if they are eligible to reclaim £240 million in unclaimed energy credit from closed energy accounts. Energy suppliers are obligated to issue final bills within six weeks of an account closure and refund any owed amounts within ten working days.
Ofgem estimates that some individuals may be entitled to over £100 in refunds, while others may only receive a small sum. More than 90% of closed account balances are automatically returned. Consumers who suspect they are owed money should review final bills received via mail or email and contact their former energy provider for further assistance.