- PM announced energy cap to save 17 million households around £100 a year
- But research suggests 7 million homes will lose out as they are on green tariffs
- Energy suppier Bulb has written to MPs calling for the loophole to be closed
More than seven million customers could lose out on the Government’s energy price cap because it does not cover green tariffs, it has emerged.
Theresa May announced a cap on bad value tariffs earlier this year saying it will save around 17 million households in Britain up to £100 on their annual bills.
But the Government’s proposed legislation states that ‘green’ tariffs will be exempt – meaning suppliers could remove millions of people from the cap.
Bulb, a green energy supplier who carried out the research, has written to MPs on the energy select committee calling for the loophole to be closed and for all customers to be eligible for the cap.
Some seven million customers could lose out on the Government’s energy price cap because it does not cover green tariffs,according to new research (file pic)
Co-founder Hayden Wood said: ‘Bulb supports the price cap, but we’re disappointed this loophole means companies could continue to overcharge customers.
‘This needs to be fixed immediately. We believe a price cap would help customers and the industry, but it must apply to everyone and not allow for spurious exemption claims.
‘The argument some make that renewable tariffs must cost more has been thoroughly disproved by Bulb, which offers one of the lowest tariffs in the UK, whilst supplying 100 per cent renewable electricity.’
The firm said their analysis raises questions a but whether the cap will deliver on the Prime Minister’s pledge to help 17 million households.
Theresa May, pictured at church yesterday with her husband Philip, said the energy price cap would ve around 17 million households up to £100 a year
Announcing her cap earlier this year, Mrs May said the it will protect around 17 million families ‘on standard variable tariffs from being exploited with sudden and unjustified increases in bills’.
The draft legislation allows for a price cap, but also provides an ‘exemption for prepayment meters and tariffs with environmental claims’.
An estimated 7.1 million households could potentially be affected by an exploitation of this loophole – meaning they could overpay by as much as £700 million a year.
The business, energy and industrial strategy select committee is scrutinising the legislation and Bulb is calling for MPs who sit on it to close the loophole.
The cap comes after growing anger at rip-off energy companies which let their customers languish on poor value contracts.