The UK government Thursday published its draft legislation to lower the cost of energy prices in the UK. Listed energy company’s share prices remained in the green, however, as they had already lost a lot of ground on in the initial energy price cap announcement a week ago.
The draft Bill outlines details giving energy regulator Ofgem the powers to cap standard variable tariffs charged by energy providers across the UK.
In mid-afternoon trading, energy firms Centrica – who owns British Gas – SSE and German provider RWE, were all trading in positive territory.
Full force of cap unlikely until 2018
While the draft Bill has been quickly published, Ofgem has admitted it’s unlikely to be able to enforce the full scope of the price cap this winter. Instead, many consumers will have to wait until the winter of 2018 to feel the benefits of this proposal.
“Following the Prime Minister’s announcement last week, Ofgem will work with the Government so that all those on standard variable and other default tariffs receive price protection as soon as possible if legislation is in place,” Ofgem said in a statement.
And, although there will still be some Britons who won’t benefit from those future energy price caps this year, Ofgem has already committed to helping cut energy bills for an additional one million people this winter.
Government reiterates energy market not working for Britons
Introducing the draft legislation, energy secretary Greg Clark supported UK Prime Minister Theresa May’s comments when she first announced the planned price cap.
“Last year the Competition and Markets Authority found that customers of energy suppliers were paying £1.4 billion a year more than they would be in a truly competitive market,” Clark said in the draft Bill.
“Vulnerable and low-income customers are more likely to be on the most expensive standard variable tariffs. This simply does not tally with this Government’s commitment to build a stronger, fairer Britain where everyone plays by the same rules,” he added.
Following the initial announcement by May at the Conservative party conference, two UK listed energy companies, Centrica and SSE saw a total, combined total of £900 million wiped off the value of their companies.