The Energy Price Guarantee had been expected to rise to £3,000, but falling wholesale prices have meant that the government has the financial leeway to continue it. By July 2023, the price cap level is expected to be lower than the EPG level, at which point it will become the prevailing cap on customers’ unit rates and the government will stop subsidising suppliers’ costs.
This also means that there is more leeway for suppliers to begin offering customers fixed deals from the summer. Those who want to hear about fixed deals as soon as they become available can sign up for email alerts from Uswitch.
Richard Neudegg, director of regulation at Uswitch.com, said: “Consumers will be relieved that the Government has acted on the pressure to postpone the planned increase to the Energy Price Guarantee.
“While energy costs are still historically high, wholesale prices are thankfully now turning a corner and we're getting close to the point when consumers can not just benefit from the status quo, but actually see lower costs on their bill.
“The Energy Price Guarantee may only be relevant for another three months. If wholesale prices continue to drop, the next price cap in July could be cheaper, meaning we’ll go back to Ofgem dictating default tariff prices every quarter.
“The focus now should be on bringing back both price certainty and choice for consumers before they have to get on the price cap rollercoaster again.
“We see no reason why suppliers can’t take advantage of the lower wholesale prices and start offering fixed deals that are below the Energy Price Guarantee.
“Seven in ten households say that customers should have the option of a fixed tariff available, with three in five willing to sign up to a fixed deal right now.
“In the meantime, households should keep a close eye on energy market updates, while continuing to monitor home energy usage in order to keep bills as low as possible.”