Falling energy prices won’t stop bills going up, says Octopus Energy

A fall in energy prices should, on the face of it, be good news, particularly after the last few years.

But that’s not necessarily the case, at least according to Octopus Energy, the UK’s biggest household energy supplier.

Speaking to the parliamentary Energy Select Committee, director of regulation Rachel Fletcher said non-commodity costs are adding about £300 a year to household electricity bills.

That’s expenses like maintaining and upgrading the energy grid and investing in new transmission networks.

And that’s going to be felt by households.

“If we continue on the path we are on, in all likelihood electricity prices are going to be 20 per cent higher - even if wholesale prices halve,” she said.

Octopus calls for review of electricity transmission investment plans

Ms Fletcher has now suggested the energy regulator Ofgem look again at its electricity transmission investment plans.

“Ofgem is very close to effectively agreeing that we need to spend £80bn on electricity transmission over the next five years,” she said.

But Ms Fletcher believes this could push up a typical electricity user’s bill by about £100 over the next four years.

“It is undoubtable we need more electricity transmission,” she commented.

“But I think there are huge question marks over do we really need £80bn worth.”

What’s going to happen to energy prices in the next few months?

The energy price cap went up by 2% on 1 October.

That’s pushed the average annual dual-fuel bill to around £1,755 and means many households could see their bills rise by roughly £35 a year.

But Cornwall Insight believes the energy price cap will fall slightly in January 2026 to around £1,725 a year for a typical dual-fuel household.

That’s a drop of £30, but this relief may not last long.

Bills are expected to rise again by around £100 in spring, thanks to the growing cost of running and upgrading Britain’s energy system.

What can I do if I’m struggling with my bills?

If you’re finding it hard to keep up with your bills, contact your supplier. 

They might be able to offer:

• grants
• payment plans
• advice on managing your account
• emergency credit if you’re on a prepayment meter

It could also be worth joining the Priority Services Register for extra support.

Another good idea is seeing where you can cut your energy usage to save money.

Have a read of our 50 smart energy-saving tips for some ideas on where to get started.