Planned changes to energy bills risks creating more uncertainty, says UEA Prof
The price cap will now change every three months under plans to ensure consumers are better protected from market shocks
An economics professor from the UEA says planned changes to energy bills risk creating more uncertainty, rather than stability for households
Ofgem, who regulate our energy prices, want to alter a review of the price cap to every three months, instead of six, saying this will better protect consumers from market shocks.
"We don't face this big rocketing of prices and then falling of prices"
Dr Mick Brock explains the regulators argument behind making these changes: "If we make that review every three months instead of every six months it gives the opportunity to smooth what it otherwise quite a volatile market and it mean that for energy companies and for us as consumers, we don't face this great rocketing of prices and then falling of prices."
"It's quite nice to have the certainty of what your energy could be"
But he went on to say the current system gives more stability, at this volatile time: "With the six month review with the energy bills, it's quite nice to have the certainty of what your energy could be, at a maximum, for six months at a time, and actually changing that to every three months, even though we might see that our bills go down, we might also be worried that what we see every three months- is our prices potentially going up.
"As an economist I can see why you're doing this, you're trying to do this to smooth the market but of course what you're really taking away by increasing the frequency with which you adjust the price cap is that you're bringing more uncertainty more regularly to consumers with things they really depend on like heating their homes."
"To some extent, we'll see this later in the year"
Dr Mike Brock says they need to do more to protect the poorest from these steep rises: "So even if the price cap is adjusted every three months, there are contingency plans in place to try and make sure that those who would be feeling the effects most severely, would have some form of shielding from the actual amounts they are paying.
"To some extent, we'll see this later in the year when the help scheme comes in place for our direct debit payments."