Letter to Ofgem regarding its third working paper on the design of the forthcoming energy price cap

In its third working paper, Ofgem was seeking feedback on whether it should include ‘headroom’ in the design of the forthcoming energy price cap. Headroom would increase the level of the cap, widening the price spread of deals available to consumers.  

In our submission [ 400 kb], we suggested that the case for including headroom was weak, and that it would be unlikely to increase switching rates - but could increase prices for consumers who do not shop around.