Ofgem has confirmed plans to postpone its previously planned update to the Typical Domestic Consumption Values for gas and electricity, along with the Economy 7 consumption split, to give itself more time to assess the impact of the coronavirus pandemic.
The regulator said it will continue to use the current values in the meantime and instructed industry to do the same.
The Typical Domestic Consumption Values are industry standard values for the annual gas and electricity usage of a typical domestic customer. They are used by Ofgem in its reports and communications and to determine the level of the price cap, and by suppliers and price comparison websites to calculate the cost of a typical energy bill.
Following a review in 2013, the regulator decided to revise the values every two years if the latest consumption data suggested a material change. Since then, there has been “consistent decreasing trend”. The most recent update took place in April 2020 and the next one was due in April 2022.
Ofgem said the early evidence indicates that has been an increase in domestic consumption since the beginning of the first national lockdown in March 2020 and that the data used to calculate the current values does not include a significant proportion of the lockdown period.
However, the regulator has decided to postpone the next update due the “exceptional circumstances” presented by the pandemic and the resulting uncertainty over domestic consumption.
The regulator noted concerns raised by one stakeholder that given that the pandemic is still ongoing, it may be some time before it can use the post-lockdown data to determine “whether it was a one-off event or if it has structurally changed consumption”. It said the pause will also reduce the administrative burden placed on industry.
Ofgem said it cannot say with confidence when suitable data will become available and hence when it will be able to carry out the postponed update but said it will continue to carry out a review of the values every two years, with the next due in 2023.