Energy bills could go up before October price cap riseon August 10, 2022 at 5:20 pm

Energy bills could increase ahead of the expected rise in October, the UK’s energy regulator has revealed.

Ofgem and industry body Energy UK said it was “possible” for suppliers to raise customers’ direct debits before the new cap on energy prices kicks in.

But British Gas told the BBC it wouldn’t put up prices before October.

Households are braced for sharp rises in energy bills over the winter, with warnings that the average bill could reach as high as £4,200 next year.

Ofgem said direct debits are usually charged in a way so that customers build up “credit” during the warmer summer months when usage is lower, to spread out the cost of using more energy in the colder months.

“It’s therefore possible for direct debits to increase ahead of a price cap rise or even when a customer’s use has remained constant,” an Ofgem spokesperson said.

However, Ofgem said customers can ask for their excess credit to be “returned at any time and can contact their suppliers to change how their direct debit is spread.”

“For example, they pay for exactly what they used in that month and do not build up a credit ahead of winter,” Ofgem said.

A new price cap– determining the maximum suppliers can charge customers for energy usage in England, Scotland and Wales – is due to be announced at the end of this month, but will come into effect in October.

Consultants Cornwall Insights expects this to rise to £3,582 a year, due to the ongoing war in Ukraine pushing up global wholesale gas prices, and have warned of further rises over the winter.

Ofgem said protecting consumers was its “top priority”, adding “suppliers must ensure that direct debit payments are based on the best and most current information available to them”.