Energy price cap explained please

QrizB

hydratoad said:

QrizB said:

javixeneize said:

Also, if a company sets a price higher than the cap, is it illegal?

Having a standard variable tariff that's higher than the price cap would be illegal, yes.

Just to clarify that some suppliers, for example Ecotricity, have permanent derogations (exemptions) from the price cap.
https://www.current-news.co.uk/news/ofgem-awards-clean-power-trio-permanent-price-cap-derogation
https://www.ofgem.gov.uk/publications/decision-issue-renewable-energy-company-limited-ecotricity-enduring-derogation-renewable-standard-variable-tariffs-default-tariff-cap

Yes, you're right, I always forget that!

eur0

Where do they quote the cap on the standing charge? When they said "The price cap is a cap on a unit of gas and electricity, with standing charges taken into account" I thought that meant the standing charge is included in the 21p/4p unit rates?

MWT

eur0 said:

Where do they quote the cap on the standing charge? When they said "The price cap is a cap on a unit of gas and electricity, with standing charges taken into account" I thought that meant the standing charge is included in the 21p/4p unit rates?

No, it means that they cap the standing charge, and also cap the total cost of the amount of energy a typical customer would use including the standing charge. Effectively their annual bill.

That way the supplier is left to decide if they want to charge a lower standing charge and a higher per kWh price or just take the standing charge to the capped level and that then determines the highest they could charge per unit.

Curiousgirl1

Also need to bear in mind that the price cap is based on paying by direct debit. If you pay by cash/cheque it is higher 

MWT

There are specific caps for other payment methods, they just don’t get mentioned much in the news. 

eur0

So what is the cap on the standing charge?

MWT

eur0 said:

So what is the cap on the standing charge?

For electricity using a single rate and paying via Direct Debit, the annual cap on the standing charge is...

North West	£84.76
Northern	£91.98
Yorkshire	£93.25
Northern Scotland	£95.23
Southern	£83.82
Southern Scotland	£86.44
N Wales and Mersey	£81.69
London	£81.02
South East	£83.56
Eastern	£83.49
East Midlands	£82.63
Midlands	£87.23
Southern Western	£89.21
South Wales	£86.44

:

You will need to add VAT at 5% to those numbers.

What_time_is_it

The unnecessarily complex way that rates are calculated should be something that the regulator is all over. Very few people understand how their bills are calculated and this causes most to simply disengage and accept what comes their way.

Having small variations for each region is bonkers! The benefit for being able to quote a single unit rate is massive. Imagine if the news could simply say that gas prices are going up from 3.6p a unit to 4p a unit, instead of quoting pointless "average user" values as if it were a cap. Small thing I know, but simplifying energy bills is surely a part of encouraging more people to use less and understand their environmental impact, as well as making sure that people have a grasp of the economic consequences of their energy use?

[Deleted User]

Funny how London is the lowest, and the whole of Northern Scotland is the highest...

bristolleedsfan

Benchmark SC/KWH rates, from my observations Big 4 price to exactly,

Bulb does not deviate from benchmark bar pricing very marginally under,

Octopus does not deviate from benchmark rates bar pricing £50 under cap for primarily exisiting variable rate customers, after which it put a higher rate variable rate tariff in current tariff list marginally under cap aka £10 less

"deviate" , I mean reducing standing charge in order to increase Kwh rate above benchmark rates or visa vera