Energy bills are projected to decrease slightly in January but could see an increase in the spring, according to experts. Cornwall Insight analysts anticipate that the Ofgem energy price cap will drop from £1,755 annually for the average household paying through direct debit to £1,733, marking a £22 reduction.
The announcement of Ofgem’s January price cap is expected this Friday. The predicted decline is attributed to a minor decrease in wholesale energy prices. However, Cornwall Insight forecasts a potential £75 yearly increase in the price cap come April.
Craig Lowrey, principal consultant at Cornwall Insight, commented that while the dip in January’s price cap may seem positive, it is only a part of the overall situation. He noted that bills remain significantly higher than pre-crisis levels and are anticipated to climb again in April, with reasons beyond just higher wholesale prices driving the rise.
The anticipated rise in April is primarily attributed to increasing charges related to the operation and maintenance of the country’s energy networks, specifically electricity transmission and gas distribution charges. Lowrey emphasized that while transitioning to renewables offers long-term stability and energy independence, it comes with real upfront costs reflected in current bills. Balancing short-term affordability with long-term resilience is crucial, along with ensuring people understand the trade-offs involved.
The price cap does not limit overall energy costs but sets a cap on unit rates of gas and electricity, including standing charges. Standing charges are fees for grid connection. Ofgem recently urged nearly two million households to check for potential refunds totaling £240 million in forgotten energy credit.
Ofgem disclosed that 1.9 million closed energy accounts still hold unclaimed funds, especially for households that have relocated in the past five years without contact from their former energy provider. Ofgem estimates potential refunds exceeding £100 for some individuals, while others may be owed smaller amounts. Energy suppliers are mandated to issue final bills within six weeks of account closure and provide refunds within ten working days.
Over 90% of closed account balances are automatically returned. Individuals believing they are owed money are advised to review final bills in letters and emails and contact their previous suppliers.