A switching charge may return as Ofgem could force energy suppliers to pay rivals when customers lure them with cheaper deals

Ofgem weighs a return

Great Britain’s energy regulator is consulting on whether to reactivate the market stabilisation charge. Under the mechanism, suppliers could owe a charge to competitors when customers move to cheaper deals.

Charge last used in 2024

The charge was activated from April 2022 to March 2024. Russia’s invasion of Ukraine drove wholesale prices sharply higher during that period, and more than 30 energy companies went bust.

Ofgem said reactivating the mechanism would not automatically create charges or raise customer bills. Kenward said the measure could help protect consumers from costs and disruption linked to an unstable market.

Criticism over switching

Lewis, responding to Ofgem’s consultation on Friday, argued that consumers would get worse deals if wholesale prices fell. He described the mechanism as a “switching penalty”. He also questioned whether the charge needs to return, noting that many energy companies have made significant profits since it was last triggered.

Bills remain a concern

The government is also considering support for energy costs. Chancellor John Healey is planning a major intervention to cut bills for poorer households in this month’s budget. The consultation comes as the regulator considers how suppliers can withstand market volatility while customers seek cheaper tariffs. Ofgem’s proposal remains under consideration.