CONSULTATION:
Market Stabilisation Consultation (MCS)
Online |
PDF
OFGEM PROPOSE
TO PROTECT RETAILERS
“WHEN” PRICES GO DOWN
PENALISING HOUSEHOLDS
Ofgem have forgotten
“They Work For Us”
“The mandate of the
regulator is to protect
consumers, not to
guarantee the profit
margins of energy
suppliers by penalising
households”
You can email a response directly to
Daniel Newport and the Price Protection Team at
priceprotectionpolicy@ofgem.gov.uk.
The deadline for responses is
29 October 2026.
Subject: Consultation
Response: Strong Objection to the Activation of the Market Stabilisation Charge (MSC)
To: Daniel Newport, Price Protection Team, Ofgem (priceprotectionpolicy@ofgem.gov.uk)
Date: [Insert Date]
From: [Your Name / Address]
Dear Mr. Newport and the Price Protection Team,
I am writing to submit my formal response to the consultation on the activation of the Market Stabilisation Charge (MSC), published on 16 October 2026;
As a consumer,
I strongly oppose the activation of the MSC. While Ofgem frames this mechanism as a tool for "market stability," the reality is that it operates as a regulatory shield for energy retailers at the direct expense of proactive, engaged consumers;
My specific objections are as follows:
1. The MSC Acts as a Hidden "Exit Fee" on Consumers When wholesale energy prices fall, consumers should immediately benefit from cheaper fixed-rate tariffs. Instead, the MSC forces the gaining supplier to pay the losing supplier to cover 85% of their hedging losses beyond the 10% trigger point. Because gaining suppliers will inevitably bake this cost into their new fixed tariffs, the MSC artificially inflates the prices of those deals. It is effectively a hidden tax levied against households who take the initiative to shop around and save money;
2. An Unjust Wealth Transfer from Customers to Retailers The consultation’s own draft impact assessment admits that in a sharply falling market, an active MSC would result in a financial transfer of up to £0.2 billion directly from engaged consumers to energy suppliers. It is entirely unacceptable for the regulator to authorize a multi-million-pound wealth transfer from household budgets to corporate balance sheets during a cost-of-living crisis;
3. Socialising Risks while Privatising Profits Consumers are repeatedly told that energy suppliers deserve their profits because they shoulder the commercial risks of a volatile wholesale market. However, the MSC ensures that if a supplier's hedging strategy results in a loss due to falling prices, the consumer is forced to bail them out. Conversely, when prices rise (as they are forecast to do significantly in January), consumers bear the full brunt of those hikes. It is fundamentally unfair for retailers to be protected from downward market movements while consumers are left entirely exposed to upward ones;
4. Stifling Meaningful Competition A healthy, functional energy market relies on the threat of customers leaving to force suppliers to offer better customer service and sharper pricing. By imposing a financial penalty on customer acquisition during a falling market, the MSC disincentivises smaller or more agile suppliers from offering rock-bottom fixed rates. By dulling the competitive edge of the market, Ofgem is discouraging consumers from engaging with the switching process at all;
Conclusion I urge Ofgem to abandon the activation of the Market Stabilisation Charge.
The mandate of the regulator is to protect consumers, not to guarantee the profit margins of energy suppliers by penalising households who simply want to access cheaper energy.
Please confirm receipt of this consultation response.
Yours sincerely,
[Your Name]