Energy bills are set to decrease slightly in January, according to experts, but there are concerns that prices may rise again in the spring. Analysts at Cornwall Insight anticipate that the Ofgem energy price cap, currently at £1,755 per year for the average household paying by direct debit, will drop to £1,733, representing a £22 reduction.
The expected decline in the price cap for January is attributed to a minor decrease in wholesale energy prices. However, Cornwall Insight forecasts a potential increase of around £75 per year in April. Craig Lowrey, principal consultant at Cornwall Insight, emphasized that while the January price drop might seem positive, energy bills remain significantly higher than pre-crisis levels and are expected to climb again in April due to factors beyond wholesale price fluctuations.
The projected rise in April is primarily linked to increased charges related to the maintenance and operation of the country’s energy networks, particularly electricity transmission and gas distribution costs. Lowrey highlighted the transition to renewables as a move towards long-term energy stability and independence, acknowledging the associated upfront costs reflected in current bills. Balancing short-term affordability with long-term resilience is crucial, with a focus on educating consumers about the significance of this trade-off.
The energy price cap does not limit the overall energy costs but sets a cap on unit rates for gas and electricity, including standing charges. Standing charges are fees for grid connections, and Ofgem recently advised nearly two million households to check if they are eligible to reclaim £240 million in unclaimed energy credit. Ofgem estimates that some individuals could be entitled to over £100, while others may have smaller refunds. Energy suppliers are obligated to issue final bills within six weeks of account closure and refund any credit within ten working days.
Over 90% of closed account balances are automatically refunded, but individuals who suspect they are owed money should monitor correspondence for final bills and contact their previous supplier if necessary.