A FREEZE on energy bills is believed to be one of a series of options for tackling soaring energy bills due to be presented to the new prime minister this week.
BBC News has reported that a variety of potential plans has been worked up in Whitehall to help people struggling across the country.
Energy industry sources are optimistic the Government will back a plan to freeze the energy cap.
One of either Liz Truss or Rishi Sunak will be announced as the new PM later today.
At the end of August, Ofgem raised the energy bill price cap by 80% to more than £3500.
A freeze on the energy price cap – the limit on how much gas and electricity can cost in England, Scotland and Wales – would not have to require upfront government funding at the beginning.
There have been several meetings between the energy industry and UK Government, including ministers close to Liz Truss – the favourite to win the Tory leadership election.
On August 23, Nicola Sturgeon also chaired a summit to discuss what could be done to help soaring costs.
The First Minister said at the time that the situation was being treated as a public emergency.
She also said that the “unaffordable” price cap rise could not be allowed to go ahead and called for action from both the UK Government and energy providers.
In an article for the Financial Times, Business Secretary Kwasi Kwarteng said a government led by Truss will borrow more to help people through “exceptionally difficult times”.
He sought to reassure markets that the UK had space to borrow more and that it would be done in a “fiscally responsible way”.
Truss did not rule out a price freeze during an interview with Laura Kuenssberg on Sunday.
However, there was still a lack of clarity about the way it would be funded and the specific ways in which Truss would help those struggling, something which was later mocked by comedian Joe Lycett.
A published version of the industry plan suggested that to hold down this year’s energy payments at £2000 for a typical households, future bills would have to repay the money.
That would leave payments not far off that level into the next decade, and require a fund of around £90 billion.
The government may need to offer some guarantees and alter existing energy industry mechanisms.
