Policy background Energy Market Background Government’s commitment
In the Queen’s Speech following the 2017 General Election, the Government committed to helping to protect customers until the conditions for effective competition are in place.
Reference: The Gracious Speech, 2017
"My government will ensure fairer markets for consumers; this will include bringing forward measures to help tackle unfair practices in the energy market to help reduce energy bills."
	In February 2018, Ofgem extended the price cap for customers with prepayment meters to a wider group of vulnerable customers. Ofgem also amended licence conditions so that suppliers can roll customers coming to the end of their contracts onto another fixed deal instead of a standard variable tariff, provided that it is the same price or cheaper than the standard variable tariff that the customer would have otherwise have been rolled on to.11
	In October 2017, the Government published a draft Bill to require a temporary price cap on energy prices. The Business, Energy & Industrial Strategy Select Committee in the House of Commons conducted detailed pre-legislative scrutiny on the draft Bill, including taking written and oral evidence from large and smaller suppliers, academics, regulators (including Ofgem), Government and other interested parties. The Committee reported in February, and supported the Bill and the policy but recommended changes to the Bill.
	This Act therefore reflects the Government’s policy intention and takes into account the recommendations of the Select Committee. The Act requires Ofgem to modify the standard licence conditions for gas and electricity suppliers, so as to include conditions that impose a price cap for standard variable tariffs and default tariffs offered to domestic customers. There is an exception for those who benefit from protections under the pre-payment meter cap (or a replacement for that cap). Ofgem may also put in place an exception for vulnerable consumers who benefit from another cap. In addition, the Act requires Ofgem to consult on exemptions for green tariffs12from the price cap. It also includes a power for Ofgem to exempt green tariffs from the price cap.
	The cap applies until the end of 2020 but it may be extended for a year at a time, until the end of 2023 at the latest, if the conditions for effective competition in the market for supply contracts are not in place. A procedure for extension is set out in the Act.