Energy regulator Ofgem has laid out plans to ease bills which could treble to more than £2,000 a year in a new move to combat soaring gas prices.
Since September, when rising gasoline prices caused suppliers to go bankrupt in September, fears of runaway household expenses have grown.
Since then, they have rocketed from 54p per therm of gas to a staggering £4.50, forcing as many as 26 suppliers out of business.
In April, households will see an increase in energy prices due to suppliers raising their prices to reflect the rising wholesale cost after industry price caps were removed.
Millions of businesses and households have now been transferred to suppliers of last resort.
Ofgem, an energy regulator, said that it was currently consulting on making changes to spread out the costs of bailing customers from failed suppliers over several years rather than one large cost.
Energy regulator Ofgem has laid out plans to ease bills which could treble to more than £2,000 a year in a new move to combat soaring gas prices
On Thursday they said it could help to reduce the bills of customers and spare customers a levy of up to £100, according to the Financial Times.
According to a spokeswoman of the regulator, “Ofgem has provided protection for more than 4 million customers during the extraordinary global gas prices in this year. It makes sure that they have access both to energy suppliers and their credit accounts are honored.
“This is a price, which we strive to minimize. Together with industry and government, we are looking at ways to reduce the negative impact these claims have on consumers.
“This involves exploring the possibility of spreading out the cost over a period of time which would reduce household bills beginning in April 2022. For this, we published a consultation.
Earlier this month, the watchdog said energy suppliers that took on the customers of failed rivals will be able to claim back more than £1.8 billion by adding it to the bills of households and businesses.
Ofgem, the regulator, said that it approved eight payments to suppliers. The largest was made to Octopus Energie, who took on the most new customers.
Employees could see bills rise 18% to £868 to cover the extra costs of heating and electricity
These news come as it has been revealed that energy companies may be given billions of pounds in loans from the Government next year to help families protect against high gas prices.
Whitehall officials have been reported to be in the process of creating a loan program that would allow firms to stop having to increase household energy bills.
This cash would allow companies to spread the current high price of wholesale gasoline over a decade. They would no longer have to transfer it to customers in one large hit.
Ministers are considering the plan, according to The Times, but officials believe the figure of £20billion which has been requested by the industry is ‘far too high’.