Future Price Protection Discussion Paper
Summary
Ofgem opens consultation on reforming the default tariff price cap, acknowledging current limitations in a dynamic retail market. The cap has reduced supplier costs but requires evolution to handle market volatility and future energy market changes. Consultation closes 10 May 2024 with response form and email options available.
Why it matters
This signals potential structural reform of retail price regulation — the cap currently socialises volatility costs across all consumers while constraining competitive pricing. The consultation frames the cap as both protection and barrier to market dynamism, creating tension between consumer protection and efficient price signals.
Key facts
- •Consultation closes 10 May 2024
- •Discussion paper covers 'broad spectrum of options' for evolving price protection
- •Links to wider retail market reform including standing charges and acquisition tariff ban
Timeline
Areas affected
Related programmes
Memo
Future Price Protection Discussion Paper | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Future Price Protection Discussion Paper Publication type: Call for input Publication date: 25 March 2024 Closed date: 11 May 2024 Status: Closed Topic: Energy pricing rules Subtopic: Energy price cap Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn The price cap has helped to drive down supplier costs and protect consumers from a volatile market. However, as we reflect on lessons from recent significant market volatility, and look to a future where the retail market will need to be considerably more dynamic, it is clear that the cap in its current form has some limitations and reform is needed to ensure it can continue to protect consumers as the retail market evolves. This is part of our work to open the discussion around price protection in the future retail market - including our publications on standing charges, affordability and debt, and the ban on acquisition tariffs. This discussion paper sets out the successes and challenges of the cap alongside a broad spectrum of options for evolving consumer price protection. We want to stimulate debate on whether there is a case for changing the current cap and whether there are alternatives that will better protect consumers. We welcome views from people with an interest in domestic energy pricing. We particularly welcome responses from consumer groups and charities, suppliers and investors. We would also welcome responses from other stakeholders and the public. How to respond We are seeking written comments on the questions set out in the discussion paper by Friday 10 May 2024. Please use the Future of Domestic Price Protection form to tell us your views. Alternatively, you can email future_price_protection@ofgem.gov.uk if you want to provide other documents such as PDFs (pdf), Word (doc) or Excel (xls) as part of your response. Respond email future_price_protection@ofgem.gov.uk Main document Future Price Protection Discussion Paper [PDF, 1.09MB] Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn Close