Energy price cap operating cost allowances review
Consultation
Closed (with decision)
- Publication date
- Closed date
- Industry sector
- Supply and Retail Market
Updated 12 December 2024
We asked
We outlined our initial options to set a new set of four operating cost allowances. We wanted views from people with an interest in how we set the operating cost allowances in the energy price cap. We particularly welcomed responses from consumer groups and charities. We also welcomed responses from other stakeholders and the public.
You said
We received 19 responses. 9 from energy suppliers, 9 from consumer groups and industry bodies, and one from an energy customer.
Stakeholders who responded to our May 2024 consultation shared their views on our options for setting the operating cost allowances. We have published the non-confidential responses.
We did
We gathered energy suppliers’ operating costs data for calendar year 2023, through a Request for Information (RFI) in May 2024.
Over the summer we carried out further stakeholder engagement on the main areas with more complex options, for example debt related costs. This included calls and conversations with regulatory directors.
In our smart metering costs working paper published August 2024, we considered options for a simpler modelled approach to setting the future smart meter cost allowance.
As part of our work on debt, we have also been collecting data through the debt-related costs (RFIs). Since April 2024 we have been collecting regular quarterly RFI submissions from industry.
We are now consulting for the last time on proposals to update the operating cost and debt allowances in the energy price cap. Read and respond to the Energy price cap operating cost and debt allowances consultation.
Original consultation
Overview
We are reviewing operating cost allowances within the energy price cap, including setting allowances based on up-to-date information, different methods and updating allowances in the future.
Who should respond
We would like views from people who have an interest in how we set the operating cost allowances in the energy price cap. This includes energy suppliers and energy industry bodies. We also welcome responses from consumer groups and charities.
Why your views matter
This review is part of our wider review of pricing reforms to make sure that the energy retail market is investable and resilient, and make sure that the price cap continues to protect energy customers.
We may decide to make changes to the operating cost allowances based on the responses we get from this review. If we do make changes, they will not be made until at least the April 2025 price cap period.
How to respond
This consultation closed on 14 June 2024. Read our review of energy price cap operating costs.