Ofgem Still Plans to Place Cap on Electricity Bills

It seems that Ofgem is still planning to place caps on electricity bills to stop the exploitation of consumers. This will also help to ensure that energy firms are more keen to the idea of investing in a low carbon economy.

According to reports, electricity bills could be capped to stop consumers from being exploited and make sure that energy companies invest the £200 billion needed for Britain’s transition to a low carbon economy. Industry sources say that Ofgem is in favor of this move, which would allow companies to independently set their electricity prices.

Some of the big six energy companies also said that they would support the price regulation, because it would guarantee them a fixed rate of return on the billions of investment the government wants them to put into building new infrastructures, such as clean coal plants.

The government’s investigation into the energy market was just among some of the policies announced. However, the manufacturers’ organization, the EEF, said that the measures, backed by less than £400 million of new funding over the next two years, were fairly limited and would do little to drive economic growth.

Experts from the Department of Energy and Climate Change and the Treasury will examine whether electricity bills are fair for consumers or not and just how energy companies can be encouraged to build more power plants and wind farms. These experts will be working closely with Ofgem, as well as the government’s committee on climate change and will report their finding in the budget that comes up next spring.