Consultation description
In a period of high and volatile prices, a sharp fall in wholesale prices can pose a risk to market stability. Responsible suppliers must buy energy ahead on behalf of their price cap customers. If prices fall suddenly and customers leave the price cap in large numbers, this can result in unavoidable losses.
During the previous gas crisis we implemented a Market Stabilisation Charge (MSC) as a mitigation. This was a payment from a supplier who gained a customer to a supplier who lost a customer, to partially mitigate losses on energy already purchased.
We reintroduced an MSC licence condition earlier this year in dormant form. Given recent wholesale price increases, we are now proposing to activate the MSC. We consider that this helps to protect consumers’ interests by supporting market stability and investability.
Who should respond
- Domestic suppliers
- Consumer groups and charities
- Third party intermediaries
How to respond
Submit your response by 29 October 2026 by emailing priceprotectionpolicy@ofgem.gov.uk.