Impact of OFGEM price cap

kparkrob

I am on all-electric with Scottish Power and our heating is a combination of direct heating panels and night storage heaters. The latter are powered on a control rate overnight. I've just had a letter from SP saying that due to the introduction of the energy price cap, my annual bill is going to increase by £526, an increase of 23% !!! The breakdown they've provided shows that the standing charge is going down by a 4 pence per day, the day unit rate is going down by about 0.3p/kwh and the night control rate is going up from 9.616 to 13.165p/kwh.
So, as far as I can see, far from ensuring I pay a fair rate for my energy, it has precipitated an attempt by SP to penalise me for it.
Has anyone else received such outrageous increases?

System

Welcome to the forum. The paperwork associated with the introduction of the Default tariff cap is not an easy read. The cap is set on typical energy consumptions; ie, if a consumer’s consumption exactly matched the typical consumption then they would only pay the cap amount for the region in which they live.

From your post, I suspect that you are on an multi-rate tariff. If I recall, an assumption was made in Ofgem’s calculations about the peak/off peak split. It is possible that your consumption doesn’t match the split%s, and you are being penalised for it. This is possibly another unintended consequence of Government fiddling with market prices. I may well be wrong.

Edit:

https://www.ofgem.gov.uk/system/files/docs/2018/11/decision_-_default_tariff_cap_-_overview_document_0.pdf

Have a look at page 14

matelodave

It's a pretty well known fact that if you give something to someone, then someone else has to pay for it.

It's even worse when the government get involved because for some reason they never consider the whole picture or see the unintended consequences of their actions.

However looking at the tables on page 14 suggests that a househould needs around 12000kwh of gas to heat their home but only 4200kwh of leccy to do the same job.

Assuming that they both need 3100kwh for the rest of their electrical needs. In what way does an electrically heated house need fewer kwh than a gas heated one to keep it warm ?. I understand that gas is only 80% efficient but that only brings the requiremt down to 9600kwh. So whats the thinking?

System

TDCVs are contained in this letter but I am sure how these figures relate to the Default Cap:

https://www.ofgem.gov.uk/system/files/docs/2017/08/tdcvs_2017_decision.pdf

PeterGr

An increase of £526 pa at the rates you've given is approximately 15,000 kWh off-peak consumption which is high, and nothing like the Ofgem TDCVs.
The price cap isn't an alternative to comparing tariffs, so your next step should be to see what alternatives you have, and consider switching.

PeterGr

Hengus wrote: »

TDCVs are contained in this letter but I am sure how these figures relate to the Default Cap.

The tariffs for the price caps are defined by the cost at zero kWh (standing charge) and the cost for the medium TDCV kWh. This defines a unit price of p/kWh. There are different pairs of costs for each of the distribution regions, and for different payment methods.

System

PeterGr wrote: »

The tariffs for the price caps are defined by the cost at zero kWh (standing charge) and the cost for the medium TDCV kWh. This defines a unit price of p/kWh. There are different pairs of costs for each of the distribution regions, and for different payment methods.

Thank you: every day is a school day. Are you able to relate the above to the OP’s cost increase?

superkoopauk

With E7 the supplier is free to choose any reasonable night rate and then the day rate is determined by the published cap levels. Not sure why SP have chosen such an increase in the night rate in this case. Naturally if they had chosen a lower night rate then the day rate would have gone up but depending on your day/night split this may have been beneficial to you

PeterGr

Hengus wrote: »

Thank you: every day is a school day. Are you able to relate the above to the OP’s cost increase?

Without full details of the existing and proposed tariff it is impossible to judge. But the price cap applies to the standard variable tariff, and at the end of a fixed deal in 2019 that would be the default option. A 20% increase from a 2018 fixed deal to the SVT would not be a surprise.
The price cap doesn't change the need to make price comparisons and to switch.tariffs

System

PeterGr wrote: »

The price cap doesn't change the need to make price comparisons and to switch.tariffs

That I agree with 100%.

molerat

PeterGr wrote: »

The price cap isn't an alternative to comparing tariffs, so your next step should be to see what alternatives you have, and consider switching.

If not a standard E7/E10 tariff it is unlikely op has an easy alternative, they are likely tied to that supplier without a meter change at their cost. Something neither the CMA and OFGEM have really addressed.