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Ofgem threatened with court action over price cap

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Written by: Emma Lunn
17/08/2022
The Good Law Project has put the energy regulator on notice of court action if it fails to comply with its legal duties to protect vulnerable customers when setting the energy price cap.

The not-for-profit organisation and campaign group Fuel Poverty Action have called on the energy regulator to conduct an “impact assessment” before implementing changes to the energy price cap.

The new energy price cap, which will take effect on 1 October, is due to be announced on 26 August.

The Good Law Project says that when Ofgem sets the price cap, it has a duty to protect vulnerable customers. It says this means it has to conduct a proper impact assessment before implementing changes to the price cap. It added that Ofgem has the power to ease the pressure of mounting bills on vulnerable consumers by imposing a separate, lower cap for them, sometimes called a ‘social tariff’.

But the group claims Ofgem have failed to do this. The new price cap is estimated to be about £3,582, marking a 180% increase from this time last year.

The Good Law Project wrote to Ofgem in July, expressing its concerns about its decision-making and asking it to provide proof of its impact assessments.

But the group says it got “a three-line reply which did nothing to ease our concerns” in response.

Together with Fuel Poverty Action and Dion Alexander, the chair of the Highlands & Islands Housing Associations Affordable Warmth Group, the Good Law Project has now written to Ofgem demanding it does more to protect vulnerable people and off-grid communities.

A statement from Fuel Poverty Action said: “Ofgem are failing in their duty to protect those most vulnerable in our societies from the horrors of living in fuel poverty. The price cap is one aspect of a failing energy system that is no longer fit for purpose and its meteoric rise is pushing millions into fuel poverty.

“Ofgem must stop acting in the interest of the energy suppliers and the fossil fuel industry, and begin to understand the life threatening conditions they are imposing on people this winter.”

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