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18th Aug 2022

Ofgem director resigns over energy price cap hike

April Curtin

Brits look set to face even higher energy costs as a result of Ofgem’s latest move

An Ofgem director has quit her job because she “could not support” its decision to add hundreds of pounds to UK household bills.

Christine Farnish worked on the British energy regulator’s board for several years, but told The Times that Ofgem had not “struck the right balance between the interests of consumers and the interests of suppliers”.

She believes several hundred pounds will be added to household bills this winter to recover additional supplier costs from consumer bills – a decision that she could not support.

Her resignation is also understood to be linked to Ofgem’s decision to change the methodology of the price cap, which will see the energy price cap changed every three months instead of twice a year. In turn, this will pass on rises in wholesale gas and electricity prices to consumers more quickly, something which experts warn will put households under even more pressure as energy costs rise further.

The director’s resignation comes as Brits continue to struggle through the cost of living crisis, with inflation at a 40-year, double figure high. Energy costs are set to rise yet again in October, when Ofgem increases the energy price cap for the second time this year. After the rise, the Bank of England believes UK inflation is likely peak at 13 per cent, and energy consultants Auxilione forecast bills to reach £4,467 by January.

Meanwhile, companies like British Gas and BP have been declaring historic profits in recent weeks and months.

An Ofgem spokesperson said: “We are thankful to Christine for her many years of devoted service to Ofgem.

“Due to this unprecedented energy crisis, Ofgem is having to make some incredibly difficult decisions where carefully balanced trade-offs are being weighed up all the time. But we always prioritise consumers’ needs both in the immediate and long term.

“The rest of the board decided a shorter recovery period for energy costs was in the best interest of consumers in the long term by reducing the very real risk of suppliers going bust, which would heap yet more costs on to bills and add unnecessary worry and concern at an already very difficult time.”

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