The summer hiatus in the opening chapter of what experts predict will be a prolonged saga of higher utility bills is drawing to a close but as we prepare to head into the second winter of the energy crisis there has been little tangible progress in revamping a market no longer fit for purpose.

There is a lot of noise right now about the need to abolish the energy price cap in favour of a simpler and more competitive system. The chief executive of industry regulator Ofgem, Jonathan Brearley, said earlier this month that government ministers should rethink the “very broad and crude” price cap mechanism. Ovo chief executive Raman Bhatia and Good Energy boss Nigel Pocklington have also said the cap should either be abolished or redesigned.

The Centre for Policy Studies (CPS) has gone a step further, saying the price cap has evolved “far beyond its intended purpose” to act as a de facto regulated market price that is driving inflation by discouraging competition among retail energy suppliers.

Introduced in January 2019, the energy price cap sets the legal maximum that energy suppliers can charge per unit of gas and electricity, as well as the maximum on fixed “standing charges” for being connected to the supply system. It covers customers on standard or default tariffs, but not those on a fixed-rate contract, living in Scotland, England and Wales.

READ MORE: UK's energy price cap is keeping bills higher than necessary

On Friday Mr Brearley’s Ofgem will announce the price that these 29 million households will pay for gas and electricity from October 1 through to the end of this year. Analysts at Cornwall Insight are predicting the price cap will fall from £2,074 to £1,823 per year for the typical dual-fuel household paying by direct debit, the lowest since March 2022 and down from a peak of £4,279 in the first three months of this year.

However, this is in part a slight of hand with the cap appearing lower because Ofgem has changed how it calculates the average annual energy bill by assuming that in response to surging prices, households will use 7% less electricity and 4% less gas than previously. Without that change, Cornwall Insight said the October price cap would be more than £100 higher at £1,925.

Furthermore, the level of the cap doesn’t take into account the government’s energy price guarantee which came to an end on July 1 and limited the average bill to £2,500 through the worst of last winter’s price spike. UK energy secretary Grant Shapps has suggested the government is unlikely to do anything similar this coming winter, which will largely offset the benefit of the lower price cap.

The Herald: The current cap for energy prices is around £2,100

“While a small decrease in October’s bills is to be welcomed, we once again see energy price forecasts far above pre-crisis levels, underscoring the limitations of the price cap as a tool for supporting households with their energy bills,” said Craig Lowrey, principal consultant at Cornwall Insight.

“As many, including energy regulator Ofgem have acknowledged, it is essential that the government explore alternative solutions, such as social tariffs, to ensure stability and affordability for consumers.”

The UK’s structural reliance on gas imports leaves it highly susceptible to fluctuations on international wholesale energy markets, meaning there is slim chance utility bills will return to pre-crisis levels of circa £1,300 until the majority of heating and electricity is generated from sustainable domestic sources. But failure to invest in the grid has left windfarms and solar arrays facing a 10 to 15-year wait to connect to the power networks, creating a sizeable gap that must be bridged in the interim.

READ MORE: A third of Scots blame energy regulators for a keeping bills too high

Many are calling for a social tariff as mentioned by Mr Lowrey to assist the most vulnerable by charging a discounted rate for gas and electricity, even if that is below the prevailing wholesale price. However, there has been little public discussion on how this would operate and be paid for, or how many of the estimated six million UK households living in fuel poverty would qualify.

In any event, the Tories have seemingly backtracked on previous commitments to consider a social tariff, which was not mentioned within the energy market reform proposals unveiled at the end of July.

One industry leader who has put some flesh on the bones of the reform debate is Centrica chief executive Chris O’Shea, who has called for the elimination of standing charges on utility bills.

British Gas, which is owned by Centrica, came under fire last month when it reported a record first-half profit of £969 million, up nearly 900% on the same period a year earlier, following a tweak to the price cap that allowed energy suppliers to recoup losses incurred during the opening stages of the energy crisis. These “backwardation payments” from Ofgem generated windfalls for others including EDF Energy and ScottishPower.

READ MORE: Cost of living: British Gas owner gets 900% profit jump

The backwardation allowance is a component of the price cap, and Mr O’Shea proposes something similar for standing charges of 53p per day and 29p per day respectively for gas and electricity connection. He suggests that these standing charges be incorporated into the unit cost of the price cap, thereby rewarding those with lower energy consumption and creating a more transparent pricing system.

Judging by some recent surveys, consumers are in desperate need of a simpler system. Comparison website Uswitch reported last week that 68% of UK households on variable tariff plans are unaware that the price cap changes every three months, while nearly a fifth of those aged 18 to 34 are entirely unaware of the existence of the price cap.

A third of those in Scotland said the price cap is responsible for suppliers not offering cheaper fixed deals, and a quarter blamed the cap for not enabling them to switch to another provider.

Government, industry and regulators have a mighty task on their hands if meaningful reform is to be achieved, but that is no excuse for delaying action as millions face another winter of being left out in the cold.