New Ofgem Price Cap Does Little to Lower Scots’ High Energy Costs.

Scottish households are still grappling with the burden of higher energy bills despite the recent price cap adjustment by Ofgem. The regulatory authority has announced a reduction in the energy price cap from £1,690 to £1,568, effective from July 1. This move represents a 7.2% decrease from the current cap level, resulting in an average annual saving of around £122 per household. However, even with this reduction, households are still paying £430 more than they were before the onset of the energy crisis in autumn 2021.

It is forecasted that the price cap may increase again in October and remain stable until January 2025, indicating that elevated energy bills are becoming a permanent fixture. Advice Direct Scotland, an organisation that operates the national energy advice service energyadvice.scot, has expressed concerns about the escalating levels of debt leading to higher bills.

The charity advocates for the implementation of a social energy tariff in the UK, which would automatically enrol vulnerable customers in the most cost-effective energy plans. Eligibility for this tariff could be determined based on factors such as receipt of benefits or low income status. Advice Direct Scotland also highlights disparities in regional standing charges, disadvantaging Scottish consumers.

Despite the overall decrease in the price cap, residents in southern Scotland will be paying a higher daily standing charge for electricity compared to their counterparts in London. Furthermore, a significant portion of Scottish households do not have access to the gas grid, relying on more expensive electricity for heating and cooking purposes.

The charity urges households to review their current energy tariffs and explore better options available in the market. However, there is a growing concern that the most favourable deals offered by suppliers are targeting wealthier households, while some tariffs are exclusively accessible to those with smart meters.

Households are advised to verify the accuracy of their energy bills to ensure they are not overcharged based on estimated usage. Those with smart meters should confirm their proper functioning, while those with traditional meters must submit gas and electricity readings to prevent overbilling.

Hazel Knowles, the energy lead for Advice Direct Scotland, acknowledges the relief brought by the reduction in energy prices but emphasises that bills still remain substantially higher than pre-crisis levels. Many individuals continue to struggle with the rising cost of living and accumulating energy-related debts without any immediate sign of prices reverting to pre-crisis norms.

Therefore, the call for a UK-wide social energy tariff persists as a potential solution to rectify the flaws in the energy market and alleviate the burden of fuel poverty among citizens.