LONDON (Reuters) – Prime Minister Theresa May will cap the power payments of 11 million British households for so long as 5 years below a brand new legislation launched to parliament on Monday, aimed toward tackling what she describes as “rip-off” power costs.
The new laws will pressure the power regulator Ofgem to cap electrical energy and gasoline costs till 2020 when the regulator will advocate whether or not it must be prolonged on an annual foundation as much as 2023, the government mentioned.
The government mentioned that some clients are being charged greater than 300 kilos than they need to be, and the cap will apply to costly plans that clients are moved to when their cheaper fastened offers finish.
“It’s often older people or those on low incomes who are stuck on rip-off energy tariffs, so today we are introducing legislation to force energy companies to change their ways,” May mentioned.
“Our energy price cap will cut bills for millions of families. This is another step we are taking to help people make ends meet as we build a country that works for everyone.”
A report by a committee of lawmakers earlier this month found that the present power market is “broken” and penalises buyer loyalty.
Home energy payments have doubled in Britain over the previous decade to a median of about 1,150 kilos a 12 months.
The power company Centrica (CNA.L) mentioned whereas it agreed that commonplace variable charges are an issue for purchasers as a result of they have no finish dates, worth controls are the fallacious answer.
“We just do not agree with introducing price controls into a competitive market which will reduce competition and choice, and therefore impact consumers,” the company mentioned in a press release.
Reporting By Andrew MacAskill, enhancing by David Evans