The UK’s big six energy firms have been handed another regulatory blow after Ofgem announced it will lower the maximum amount paid by prepayment gas and electricity customers.
About three million customers who use prepayment metres will see a reduction in their annual bills of up to £19 from October 1.
Shares in London-listed utility stocks fell in morning trading.
British Gas owner Centrica plc (LON:CNA) fell 1.05% to 197.60p each while SSE plc dipped 0.36% to 1,398p and Utilitywise plc (LON:UTW) slid 5.65% to 60.15p.
The energy watchdog first introduced a price cap on prepayment meters in April this year in response to a two-year investigation into the energy market, which found the big six suppliers were overcharging customers by up to £1.4bn a year. The big six include British Gas, SSE, EDF, e.on, npower and ScottishPower.
Ofgem plans to update the tariff every six months.
The average cap was set at between £547.07 and £625.85 per year for electricity and £520.07 per year for gas. This will now drop to between £528.28 and £600.13 for electricity and £519.74 for gas.
The average cap on dual fuel will fall to £1,048 from £1,067.14 per year.
The news comes after Centrica last week announced plans to raise the price of electricity by 12.5% from mid-September. It said average dual fuel bills "for a typical household on standard tariff" will rise by £76 to £1120, an increase of 7.3%.