After 0.2% price cap increase, energy bills for most Britons are on the rise

The regulator Ofgem has announced that it will increase its domestic price caps by 0.2% in January, due to increased policy costs.

The government will suffer a setback, even though the increase is small. It has promised to lower energy prices, and it faces pressure next week to unveil budget measures to help reduce household bills.

The increase is due in part to an addition of nearly one pound per bill to pay for the new Sizewell nuclear plant, which is estimated to cost around 38 billion pounds ($50billion). This is despite wholesale energy prices falling by 4%.

Ofgem's formula for calculating the price cap includes wholesale gas and electricity prices. However, network and policy costs have become a bigger part of bills as network upgrades are made and social and environmental charges are increased.

The cap has been raised by around 3 pounds for the period between October and the end of December. $1 = 0.7639 pounds (Reporting and editing by Sherry Jacobi-Phillips in London, Rashmi aich, Conor Humphries, and Yadarisa shabong in Bengaluru)

(source: Reuters)