Energy regulator Ofgem has delayed the follow-up consultation for its review of additional wholesale costs until November/December 2023.
In an open letter, Ofgem made the decision to delay the consultation from late September to “late November/early December 2023” to “ensure the analysis and calculations used to consider an adjustment, are robust”. Ofgem is inviting stakeholders to submit their views and comments by 23 October.
This delay will also shift the implementation date of a possible adjustment from January 2024 to April 2024.
Ofgem stated that it hopes the revised timelines will “assure stakeholders that we are allowing time to properly consider whether an adjustment is appropriate”.
The intention of the review is to consider whether an adjustment to the default tariff cap, more commonly known as the energy price cap, is appropriate.
One of the biggest reasons for the review into the default tariff is due to the inclusion of wholesale costs within its pricing, something that often makes up the largest portion of customer bills. Indeed, with the wholesale gas crisis having triggered historically high energy prices, many have been calling for a review into the way the pricing works.
It is worth noting that energy prices have now seen a huge reduction in costs with the latest price cap, which came into force on 1 October, being set at £1,923, a £151 drop on the previous cap.