Energy bills are anticipated to decrease slightly in January, with a potential subsequent increase in spring, according to industry experts. Analysts from Cornwall Insight project that the Ofgem energy price cap, currently at £1,755 annually for the typical household paying by direct debit, could drop to £1,733, marking a £22 reduction.
The official announcement of the January price cap by Ofgem is scheduled for this Friday. The predicted decline is attributed to a slight decrease in wholesale energy prices. However, Cornwall Insight foresees a potential £75 annual increase in the price cap come April.
Craig Lowrey, a principal consultant at Cornwall Insight, expressed caution regarding the temporary price drop in January, emphasizing that bills remain significantly higher than pre-crisis levels and are expected to rise again in April, driven by factors other than higher wholesale prices.
The anticipated rise in April is mainly attributed to escalating charges related to the maintenance and operation of the country’s energy networks, particularly electricity transmission and gas distribution charges. Lowrey highlighted the transition to renewables as essential for long-term stability and energy independence but acknowledged that the associated upfront costs are impacting current bills.
The price cap functions to limit the unit rates of gas and electricity, along with standing charges, rather than capping the overall energy costs. Standing charges are fees for grid connection. Ofgem recently urged nearly two million households to check for potential reclaimed £240 million in forgotten energy credit.
Ofgem disclosed that 1.9 million closed energy accounts still hold unclaimed funds, including households that have relocated in the past five years without contact from their former energy provider. Some individuals could be eligible for refunds exceeding £100, while others may only receive a nominal amount. Energy suppliers are mandated to issue final bills within six weeks of an account closure and refund within ten working days.
Over 90% of closed account balances are automatically refunded. Consumers who suspect they are owed money should review final bills received via mail or email, and reach out to their former supplier for further assistance.