Awful April or Awful Ofgem?

1 April 2025, 14:29

Millions of people in the UK suffered in cold and damp homes this winter.

Figures from the ONS suggest a 3359 increase in excess winter deaths among over 75s, with the impact of high fuel costs and the loss of winter fuel payment unclear.

But today, another energy price increase has been waved through by Ofgem. Costing £111 more a year on average per household combined with other rises and cuts to welfare. For Holly, our member protesting against the rise today, this means “debt, panic and terror”.

Holly says, “I had cancer as a child and barely survived. It means I’ve become more disabled as I’ve aged. My home is going mouldy because I can’t afford to heat it. I’ve cut everything down to the bone and sold possessions. I feel I’m being ignored and left behind by the government and Ofgem.”

Ofgem’s latest price cap is 77% higher than in 2020/21. Since then we’ve paid 1.5 to 2 times more for energy with £4 billion in unpaid bills. Barely a dent in the takings of energy firms, with figures showing over half a trillion pounds profit during the period.

The week before Ofgem announced the rise, we found out network companies like National Grid pocketed £4 billion excess profits due to an Ofgem error. This loophole was identified years ago, overestimating costs faced by firms and setting the price cap too high.

Why then shouldn’t the British public be compensated for this error by lowering it now? Where Ofgem is concerned, it is a consistent story of siding with energy firms and avoiding action to reduce prices. But there’s no shortage of options to bring bills down.

Scrapping standing charges could return £300 into people’s pockets by making energy firms pay their own operating costs like any other business. Maybe encouraging them to make some sacrifices for a change; SSE just announced a new CEO on a £1 million salary.

Untethering the price charged for electricity from the much higher cost of gas is a no brainer for moving towards fairer, cheaper and greener pricing. We currently pay 27p a unit when renewable electricity costs only 7p to produce.

So cheaper energy is not an ambition, but a reality being held back by the regulator. If Ofgem would implement the sensible reforms available to them then everyone’s basic energy needs could be met.

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Stuart Bretherton is Campaigns Lead at Fuel Poverty Action.

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