Ofgem has opened a consultation on how the household price cap should treat time-of-use tariffs. It sounds technical, and it is. It also shows where the electricity market is heading, which matters to anyone who buys power for a business.
What Ofgem has proposed
The review is tied to Market-wide Half-Hourly Settlement, usually shortened to MHHS. Under the old arrangements, suppliers were charged for the electricity their customers used on the basis of estimates and averages. Under MHHS, they are charged for what customers actually use in each 30-minute period.
That matters because electricity does not cost the same at every hour. It is often cheaper when wind and solar output is high and dearer at peak times, when gas generation has to fill the gap. Ofgem says suppliers will face higher costs for customers who draw more at expensive peaks, and lower costs for those who shift use to cheaper periods.
The current price cap was designed when Economy 7 was almost the only widespread time-of-use tariff and half-hourly settlement did not exist. More than 60% of domestic customers, roughly 20 million households, are protected by the cap, so getting the design right is a big job.
Ofgem has set out three options. The first is regulated time bands: two or three of them, with Ofgem setting a maximum unit rate for each based on the average cost of supply in those hours. The second is separate caps for different customer groups, such as EV owners and heat pump households, reflecting how they use electricity. The third lets suppliers design their own time-of-use cap structures using Ofgem’s half-hourly cost data and customer demand profiles, with Ofgem checking the tariffs and customer groups afterwards. That gives suppliers the most freedom, and it would be the hardest to regulate.
Why the timing matters
Roughly 24 million electricity supply points had moved to half-hourly settlement by September 2026. Migration is expected to finish by May 2027, and Ofgem is aiming to bring in initial changes to the time-of-use cap methodology in the second half of 2027. The consultation closes on 20 November 2026, with responses going to priceprotectionpolicy@ofgem.gov.uk.
There is a policy aim behind the technical work. Ofgem says Britain will need 10 to 12GW of consumer-led flexibility by the end of the decade to deliver Clean Power 2030. Electric cars, heat pumps, home batteries and smart appliances could all move demand away from expensive periods, but only if tariffs reward people for doing it.
The regulator has also been open about the downside. Customers who cannot easily change when they use power must still receive effective protection and should not be unfairly penalised by a more complicated market. Whichever option wins, how well it protects those customers will be the test.
What it means for business energy buyers?
The consultation is about the domestic cap, which does not apply to businesses. Non-domestic contracts are not price-capped. It is still worth a business reader’s attention because MHHS covers business supply points too.
Here the news is fairly calm. According to TotalEnergies, customers billed on meter reads today will see very little change, and those already billed on half-hourly consumption will see none. Full implementation is due between May and July 2027, with all electricity settled on half-hourly data. Businesses with smart or AMR meters are likely well placed. Some sites may need a meter upgrade, a change of measurement class or a configuration change, and suppliers say they will contact affected customers directly. Customers with no smart or AMR meter will need one to operate fully under the new arrangements. Costs for that work are not set out in the supplier’s guidance, so it is worth asking your supplier directly.
The opportunity is the data. Half-hourly readings show when a site uses power, and that is the starting point for any decision about shifting load, running a battery or taking a tariff that rewards flexibility. Every site will have a different profile, and estimates never let you see yours.
What to do now
There is no deadline for businesses in the consultation, and nothing needs to be done by 20 November. A few steps are still worth taking. Check what kind of meter each site has and whether your supplier has flagged any upgrade. Ask for your half-hourly data if you do not already receive it. And when your contract comes up for renewal, ask whether time-of-use or flexible products are on offer, and what they would have cost you over the last year.
Ofgem’s choice between regulated bands, customer-group caps and supplier-designed structures will not be settled until well into 2027. The direction is already clear: electricity will be priced by the half hour, and businesses that know their own load shape will be better placed to use that.