The Office of Gas and Electricity Markets (Ofgem) in the United Kingdom announced on Friday its plan to raise energy bills by £16 to avoid market and consumers falling into "growing risk of 'bad debt'."
The energy regulator stated that debt that "is unlikely to be repaid" has reached almost £3 billion, its highest ever level, due to elevated wholesale energy prices and cost of living burdens. That is why to address this, "a one-off price cap adjustment of £16 equivalent to around £1.33 a month" is proposed to be paid between April 2024 and March 2025.
"The record level of debt in the system means we must take action to make sure suppliers can recover their reasonable costs, so the market remains resilient, and suppliers are offering consumers support in managing their debt … [ensuring] the costs are recovered fairly, without penalizing a particular group of customers," Ofgem's Director General for Markets, Tim Jarvis, said.
