Around 10 million households are being told to send their meter readings to their supplier this weekend to ensure they don’t overpay when cheaper prices come into effect on July 1.
The average household energy bill will fall by 7% from next month after Ofgem cut its price cap in response to wholesale prices.
The regulator is reducing the cap from the current £1,690 for a typical dual-fuel household in England, Scotland and Wales to £1,568, a drop of £122 over the year.
This is around £500 less than the cap in July last year, when it was £2,074.
However, households on a standard variable tariff – as opposed to a fixed tariff – and who do not have a smart meter should pass their electricity and gas readings to their supplier as close to the 1st price as possible.
Those who do not submit their metered values risk having some of their usage charged at the previous, more expensive rates after that date.
Suppliers who have not received meter readings base their bills on estimated usage, meaning households may overpay while others may not pay enough.
The average household is expected to spend £83 on energy in July, compared with £127 in June, due to a lower cap and lower consumption due to warmer weather, comparison website Uswitch has calculated.
The latest drop offers households further relief from the previous quarter-on-quarter drop recorded in April, but analysts expect Ofgem to raise the price cap in October before cutting it again in January 2025.
Ben Gallizzi, a spokesman for energy company Uswitch, said: “Households should add ‘read my meter’ to their to-do list this weekend if they want to take full advantage of lower energy prices from July.
“Customers who do not have a smart meter should aim to submit their readings before or on Monday 1 July so that their supplier has an updated – and accurate – view of their bill.”
Uswitch has also urged households to explore other tariffs, including landline deals, to beat the predicted October price rise.
Mr Gallizzi said: “There are currently a number of fixed tariffs worth considering. If you opt for a fixed deal, you lock in these rates for a period of time – usually 12 months – meaning households can be sure of the price and avoid fluctuations in the price cap.”
Meanwhile, a coalition of consumer groups and energy firms urged Ofgem not to allow firms to cut their existing customers off their cheapest deals.
Ofgem said it intended to lift the ban on acquisition-only tariffs, which firms used to attract new customers or entice switches from rival firms, from October 1.
Who? said it feared households who wanted to stay with their current supplier could be worse off as they would be hit with so-called “loyalty penalties”.
The watchdog has written to the regulator, along with E.ON, Octopus, So Energy, Rebel Energy, the End Fuel Poverty Coalition, Citizens Advice and Fair By Design, urging it to reconsider its proposals to lift the ban.
Rocio Concha, which one? director of policy and advocacy said: “Our research has shown that consumers overwhelmingly believe that cheaper energy deals available only to new customers are unfair – even though they could benefit.
“Therefore Which? and a coalition of energy firms and consumer organizations wrote to Ofgem to warn them not to lift the ban on acquisition-only pricing.
“Allowing deals exclusively for new energy customers could open the door to loyalty penalties and come at the expense of those who want to keep the best deal with their current supplier.”
An Ofgem spokesman said: “We are grateful to consumer groups and stakeholders for their response to our statutory consultation.
“We appreciate the strength of feeling on this issue and will carefully consider all perspectives in the coming weeks to inform our final decision.”