Price Cap with Economy 10

AjayK57

I have been on an Economy 10 meter for a number of years now as I only have storage radiators for heating and the price cap seemed to benefit me, unless my understanding of how it worked was wrong. Up until April 2020 the Night Tariff was 4.87 kwh but increased to 10.77 kwh (inc VAT) despite my understanding that the price cap had gone down at that time. It's not been so much of an issue during the summer months with no heating needed but I now have to think towards the winter and am reluctantly considering having the meter changed to Economy 7 with my current provider (EDF). I hear today that the price cap will fall again in October so how will this effect my night tariff? Maybe my confused understanding thinks it should make it go down but it didn't in March so would appreciate advice and clarification. 
Just for information in March the Peak rate did go down from 30.01 to 24.05. The tariff I am on is Flexible Control Mar21 which states my rates would always be 2.5% below the price cap. 

matelodave

The price cap doesn't actually mean that rates will go down - it's just a maximum amount that the supplier is allowed to charge so when it was introduced many people saw their energy bills rise as the suppliers raised their prices to the cap level.

You can have  a read here to get some idea of what's going on - https://www.ofgem.gov.uk/energy-price-caps/about-energy-price-caps/your-questions-answered-energy-price-caps#:~:text=Energy%20price%20caps%20limit%20how,being%20overcharged%20by%20energy%20suppliers.

there's also lots more info if you trawl t'interweb. Generally the price cap only apples to the suppliers "evergreen" or standard variable tariffs so if you've got something different or a fixed tariff then it doesn't necessarily come under the rules and they can charge what they like.

Be aware that if you are on an E10 tariff then your heaters usually get an afternoon and evening boost (timings are usually something like, 5 hours during the night, 2 in the afternoon and 3 in the evening) whereas E7 is just one 7 hour charge through the night. Your heaters may not be sized to store enough energy in seven hours to keep you warm until the next seven hour period starts and you could end up having to use peak-rate heaters during the later afternoon/evenings - so it's worthwhile checking before jumping to e7.

 Not every supplier offers e10 so you need to do a bit of searching to see what is available

MWT

matelodave said:

The price cap doesn't actually mean that rates will go down - it's just a maximum amount that the supplier is allowed to charge so when it was introduced many people saw their energy bills rise as the suppliers raised their prices to the cap level.

The OP is on a strange tariff...

It is a standard variable rate tariff that is set to track the cap -2.5%.

No idea why this would be a good thing when there are so many cheaper tariffs around but it may be related to the need for E10 perhaps?

AjayK57

Thank you both for your replies. I have stayed on E10 for several years because of the additional charging benefit it gives in the afternoon and evening for the storage radiators. I do fear that if I change to E7 during the cold months there will not be sufficient heat left in the radiators for the evenings. How do I actually check that a jump in price from 4.87 to 10.77 kwh (121% increase) is correctly in line with the price capping? They did put the day rate down but it doesn't compensate for the increase in the night rate. I'm just wondering if for some reason the strange tariff I am on is no longer covered by the cap and I have not managed to get a definitive answer from the supplier. Price Cap goes down but my price goes up - I don't understand!

MWT

AjayK57 said:

How do I actually check that a jump in price from 4.87 to 10.77 kwh (121% increase) is correctly in line with the price capping?

It is a little difficult to follow your pricing, do you mean 4.87p/kwh changing to 10.77p/kwh?

If so that seems like it was a very cheap tariff originally and probably not the same tariff as the one you are on now?

How long have you been on the 'Flexible Control Mar 21' tariff?

AjayK57

Just been looking back at old bills:
In January 2019 the night rate went down from 9.62p per kwh to 4.19p ex VAT - At this time I was on Standard Variable
On 26th April 2019 I changed to Flexible Control Mar21 and the night rate remained at 4.19p
It fluctuated occasionally from April 2019 but remained around the 4.??p 
In April 2020 was when the big increase came up to 10.25p (Ex VAT) and 10.77 (Inc VAT) although they didn't formally notify the increase until May 2020 with an apologetic letter.
The whole time has been on an E10 meter.

MWT

Since your tariff is a variable rate tariff, it can change at any time but the T&C should have some words in there about how they notify of the changes and how far in advance...

The interesting part though is that since it is also supposed to track the cap it really should only change twice a year, but as a multi-register tariff (day/night) it is the blended rate that should be used to check against the cap so I suppose one can go down while the other goes up and still follow the cap.

AjayK57

Anyone know the maths to work out if the rates are in accordance with the cap.

matelodave

There you go, try and pick the bones out of that. https://www.ofgem.gov.uk/publications-and-updates/default-tariff-cap-level-1-october-2020-31-march-2021

The cap is different for the region you are in and varies depending on the way you pay your bill and even whether you have a multirate tariff or not. It's also based on an "average customer" with an average consumption.

The problem is that the cap is an aggregation of the standing charge and an average amount of energy, so although you can try and make an educated guess you can't actually get it down to a specific cost per kwh, especially if you have a multirate tariff as they can mix it around as much as they like In theory they could charge more for off-peak than peak rate providing the cost for the specified number of kwh doesn't exceed the cap


BTW the cap is changing in October this year. You'll note the helpful advice to Customers that suggest you ask your supplier what the cap is