Energy bills are set to decrease slightly in January before potentially increasing in the spring, according to industry experts. Cornwall Insight analysts are forecasting a drop in the Ofgem energy price cap from £1,755 annually to £1,733 for typical households paying by direct debit, marking a £22 reduction.
The upcoming announcement by Ofgem this Friday is expected to reveal the January price cap adjustment attributed to a minor decline in wholesale energy prices. However, Cornwall Insight anticipates a subsequent rise of approximately £75 per year in April.
Craig Lowrey, a principal consultant at Cornwall Insight, emphasized that while the January price cap decline may seem positive, it is part of a larger trend. He stated that energy bills remain significantly higher than pre-crisis levels and are projected to escalate further in April, with reasons beyond just increased wholesale prices.
Lowrey highlighted that the transition to renewable energy sources will bring long-term stability and energy independence but comes with tangible costs that are now reflected in bills. Balancing short-term affordability with long-term resilience is crucial, along with ensuring consumers understand the significance of this balance.
The expected April price hike is mainly attributed to rising expenses related to maintaining the country’s energy networks, specifically electricity transmission and gas distribution charges. The price cap focuses on limiting unit rates of gas and electricity, along with standing charges that consumers pay to be connected to the grid.
Ofgem recently urged nearly two million households to check if they are eligible to claim back £240 million in unclaimed energy credit. This amount is from closed energy accounts where the old supplier failed to contact the customers, including those who relocated within the past five years.
According to Ofgem, individuals could potentially reclaim over £100, while some may only be owed a small sum. Energy suppliers are obligated to issue final bills within six weeks of an account closure and refund any due amount within ten working days.
Typically, more than 90% of closed account balances are automatically refunded. Consumers who suspect they are owed money should review final bills received through letters or emails and reach out to their former energy provider for further assistance.