Energy firms want to FREEZE bills this winter as price cap set to soar this week

ENERGY firms are backing a plan to freeze bills this winter as the price cap is set to rise.

The bosses of Octopus Energy, Ecotricity and Utilita have showed their support for a scheme called the tariff deficit fund.

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It could see the price cap frozen at roughly its current level – £1,971 – with firms calling on a state-backed fund to stop rising costs being passed on to customers.

Commercial banks would supply the cash to spread the cost of an emergency funding package over a decade.

The costs would then be paid back through a surcharge on bills or through tax.

Greg Jackson, chief executive and founder of Octopus Energy, told BBC Radio 4’s Today programme: “Essentially we freeze the price cap roughly where it is and fund that during times when energy prices are very high, and pay it back when it’s coming down.

“That would see prices around where they are now, which is still by the way, two thirds above where they were a year ago.”

He added that if the price of beer had risen at the same rate as energy, a pint could cost £25.

British Gas owner Centrica, ScottishPower and E.ON are also backing the bill freeze, according to The Guardian.

Energy regulator Ofgem will announce on Friday what the energy price cap will increase to this autumn. The change will come into effect on October 1.

But experts have warned that some firms are already hiking bills in anticipation of the increase.

It comes as analysts have warned that energy bills could hit £6,000 next year.

But there is a warning that some firms are already hiking bills in anticipation of the increase.

And a number of customers are complaining of unfair energy bill hikes, reporting on social media that their direct debit has been increased fourfold, or their monthly payment has gone up even though they are in credit.

Dale Vince, founder of Ecotricity, said the government needs to offer a similar level of support to households as it did to business during the pandemic.

“We need £40 billion to get through this winter – that’s 10% of what was spent during the pandemic”, he told BBC Radio 4.

“That’s the only thing that will really sort this problem out.”

While Bill Bullen, chief executive of Utilita, has called for the Conservatives to end their leadership contest early so the next government can tackle the energy crisis.

He said: “All through the summer, we’ve been hearing about customers in distress, customers who are worried that they’re not able to heat their homes over this coming winter.

“That’s why we’re saying to the Government, you’ve got to take this decision to freeze prices at their current level right now.

Energy bill help

There are schemes offered by suppliers, local councils, charities and the government that could help.

If you’re struggling with energy costs or other bills there are plenty of organisations where you can seek advice for free, including:

You should speak to your energy supplier in the first instance as they have schemes in place to help with bills and arrears, including hardship funds and grants.

For example, British Gas and Octopus have set up funds worth up to £750 to help customers who are struggling with their bills.

Your local council may also be able to help with cash and grants if you are struggling with bills through the Household Support Scheme.

You should also check that you’re getting all the benefits you’re entitled to.

Use an online benefits calculator to make sure you’re not missing out on any extra cash.

Similarly, you can search for charity grants that help you pay for gas and electricity bills.

There’s more help from the government on the way too, later in the year in the form of one-off cost of living payments worth as much as £1,500 depending on your circumstances.

The £300 is on top of the annual winter fuel payment where those getting the state pension can get between £100 and £300 to offset the cost of keeping their homes warm over the colder months.

Low income households can get a one-off £150 payment under the existing warm home discount scheme – applications open in the autumn.