British regulator orders €81 cut in household bills

By Nina Chestney and Noor Zainab Hussain

Energy bills are set to fall for millions of households in Britain this winter, after the country’s energy regulator told suppliers to reduce bills by 6% from October, following a drop in wholesale gas and power prices this year.

Britain’s big six energy suppliers are Centrica’s British Gas, SSE, Iberdrola’s Scottish Power, Innogy’s Npower, E.ON, and EDF’s EDF Energy. The regulator, Ofgem, said the price cap for average annual consumption will fall by £75 (€81.40), to £1,179, from October 1. In April, the cap was raised by 10%, to £1,254 pounds.

“Wholesale energy prices have significantly fallen between February and June 2019. A combination of low demand during the winter, strong gas supply, and relatively healthy storage levels have pushed down wholesale prices,” Ofgem said. Wholesale UK gas and power prices have steadily lost up to half their value since last September. Ofgem was tasked with taking action by the UK parliament, after MPs said customers were being overcharged for electricity and gas.

The price cap applies to the so-called standard variable tariff, the most popular type of rate offered by the big six, as well as to other default deals, and is intended to be a temporary measure, lasting until 2023 at the latest. Around 11m customers are on standard tariffs.

Dermot Nolan, CEO of Ofgem, told reporters the difference between standard variable tariffs and other tariffs will likely fall in the coming months.

- Reuters