Ofgem is proceeding with an update to the typical domestic consumption values (TDVCs) used to compare energy bills to reflect falling electricity usage by households.
However, the regulator has decided against changing the assumed split between peak and off-peak consumption for customers on an Economy 7 tariff as proposed in an open letter in October.
It has also decided against making corresponding changes to the consumption values used to calculate the prepayment and default tariff price caps. Several respondents to the letter raised concerns that this would prevent suppliers from recovering efficiently incurred costs.
Ofgem said despite falling electricity usage, average consumption is still higher than the current TDCVs, which were set in 2017: “The change in TDCV therefore will not result in suppliers under-recovering efficiently incurred costs when they price at the level of the price cap. For this reason, we do not consider it appropriate to change the upper benchmark annual consumption value in the price cap.”
It said the revised values, which are listed below, should be adopted by the energy industry and other stakeholders from 1 April 2020.