Energy bills are anticipated to see a slight decrease in January, followed by a potential increase in the spring, according to experts. Analysts at Cornwall Insight project a drop in the Ofgem energy price cap from £1,755 annually to £1,733 for the average household using direct debit, marking a £22 reduction.
The expected decline in the January price cap is attributed to a minor decrease in wholesale energy prices. However, Cornwall Insight forecasts a potential £75 annual increase in the price cap by April. Craig Lowrey, principal consultant at Cornwall Insight, emphasized that while the January dip may seem positive, bills remain significantly above pre-crisis levels and are likely to climb again in April due to factors beyond higher wholesale prices.
The anticipated rise in April is primarily linked to escalating charges associated with maintaining the country’s energy networks, specifically electricity transmission and gas distribution charges. Lowrey highlighted the shift to renewables as a move towards long-term stability and energy independence, though acknowledging the current impact on bills. Balancing short-term affordability with long-term resilience is crucial, with a focus on educating people about the trade-offs involved.
The price cap does not restrict total energy costs but sets limits on unit rates for gas and electricity, along with standing charges. Standing charges are fees for grid connection. Ofgem recently urged nearly two million households to check for potential refunds totaling £240 million in unclaimed energy credit, as many closed energy accounts still hold funds. Ofgem estimates that some individuals could claim over £100 while others may be owed smaller amounts, with energy suppliers required to issue final bills within six weeks of account closure and refund within ten working days.
Over 90% of closed account balances are automatically returned, but individuals who suspect they are owed money should review final bills and contact their previous energy supplier accordingly.