Theresa May’s new energy price cap will have to RISE by £50 just weeks after it starts in January
MILLIONS of Brits face a near £50 increase in energy bills in the New Year after regulators declared they will have to RAISE a new price "cap".
Ofgem today confirmed plans to introduce a cap on 11million standard variable bills – setting the price for January 1 at £1,137 a year.
But Ofgem chief Dermot Nolan said an increase would almost inevitably have to be announced just weeks later given the spiralling cost of electricity on wholesale markets.
Under the Government’s new plans the price cap is reviewed every Spring and Autumn.
Mr Nolan said: “We will be making an announcement in February and it’s true that the underlying cost of producing electricity has risen.”
He insisted Ofgem would only be “passing through costs” and “no company would profiteer”.
But analysts said a price rise of £47 was on the cards.
City experts JP Morgan said: “Ofgem admit that it is likely that in February 2019 it will announce an increase in the level of the cap to take effect in April.
“We estimate that the increase, based on wholesale prices today, would be around £47, implying a cap from April of £1,183.”
Switching site LookAfterMyBills said the rise could be closer to £76.
The revelation threatens to humiliate the Government – given its vow that the new cap was being introduced to protect customers from eye-watering tariffs.
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Theresa May last year vowed the price cap would SAVE families £100 a year by ending a £1.5billion rip-off.
Energy Minister Claire Perry yesterday insisted the Government had “delivered on its promise”. She said: “Today’s final cap level brings greater fairness to energy prices and puts consumers at the heart of the energy market.”
The price cap follows a two –year campaign by the Sun for a fairer deal on power prices. Business Secretary Greg Clark accused energy giants of “milking” loyal customers who stay on standard variable tariffs and never switch.
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