CAMPAIGNERS called for targeted energy support for struggling households after sector regulator Ofgem raised the prospect today of its cap on annual bills rising by £17 to prevent suppliers from going bust.

The regulator said it was considering the one-off increase as part of a consultation after figures this summer showed that consumer debts had reached a record £2.6 billion due to soaring wholesale prices and cost-of-living pressures on households.

It warned that taking no action could leave consumers facing even higher costs and poorer standards. If approved, any raising of the cap would be delayed until next April to protect consumers from extra costs over the winter.

Ofgem director general for markets Tim Jarvis said: “We know that households across the country are struggling with wider cost-of-living challenges, including energy, so any decision to add costs to the price cap is not one we take lightly.

“However, the scale of unrecoverable debt and the potential risk of suppliers leaving the market or going bust, which passes on even greater costs to households, means we must look at all the regulatory options available to us.

“Ofgem cannot subsidise energy or force businesses to sell it at a loss and suppliers must be in a position to offer high-quality services to customers.

“We must consider the fairest way to maintain a stable energy market and we will do this in consultation with all our partners to ensure we are protecting the most vulnerable households.”

But End Fuel Poverty Coalition co-ordinator Simon Francis said: “Households are struggling under the huge weight of energy debt, which has been caused through no fault of their own but by rising prices.

“All this time, energy firms have continued to profit from the misery of people racking up debt and living in cold, damp homes.

“Rather than pass on more increases to energy bills, the government needs to work with energy firms to introduce a ‘help to repay’ scheme to help get Britain’s households back on to an even keel.

“Given that the government is due to hand Norwegian oil giant Equinor a massive tax break for the controversial Rosebank fossil fuel field, there’s an obvious source of money for this support plan.”

National Energy Action chief executive Adam Scorer added: “While industry and regulator-led support is welcome, the government must put in place additional targeted support and establish a help to repay scheme and an enduring social tariff.”