Energy price cap explained please

MWT

What_time_is_it said:

Having small variations for each region is bonkers! The benefit for being able to quote a single unit rate is massive.

There are however regional differences in the costs, those numbers don't just come out of thin air...

What_time_is_it

MWT said:

What_time_is_it said:

Having small variations for each region is bonkers! The benefit for being able to quote a single unit rate is massive.

There are however regional differences in the costs, those numbers don't just come out of thin air...

Agreed. But the benefits of accounting for these regional differences within the price structure are, in my opinion, far outweighed by the benefits of clarity and increased understanding that a single national unit price and standing charge would bring.

MWT

What_time_is_it said:

MWT said:

What_time_is_it said:

Having small variations for each region is bonkers! The benefit for being able to quote a single unit rate is massive.

There are however regional differences in the costs, those numbers don't just come out of thin air...

Agreed. But the benefits of accounting for these regional differences within the price structure are, in my opinion, far outweighed by the benefits of clarity and increased understanding that a single national unit price and standing charge would bring.

As long as the costs are real we are stuck with the differences as those small variations add up to a lot of money when multiplied by millions of customers...

What_time_is_it

We're not stuck with them at all. The regulator could insist that regional price differences are averaged out and a single rate is charged across the whole country.

I honestly think that the number of people who understand their energy bills is very small, and I think we underestimate the value of simplicity and clarity. It's clearly in the interests of the energy companies to have bills that are complex and very difficult to compare but, to put is as politely as I can, balls to them.

[Deleted User]

What_time_is_it said:

The unnecessarily complex way that rates are calculated should be something that the regulator is all over. Very few people understand vhow 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?

Ofgem sets the Cap and the rules so, arguably, the Regulator is all over it. Regional standing charges reflect, in part, the differences in distribution costs across the UK.

MWT

What_time_is_it said:

We're not stuck with them at all. The regulator could insist that regional price differences are averaged out and a single rate is charged across the whole country.

I honestly think that the number of people who understand their energy bills is very small, and I think we underestimate the value of simplicity and clarity. It's clearly in the interests of the energy companies to have bills that are complex and very difficult to compare but, to put is as politely as I can, balls to them.

#1 The regulators are in enough trouble as it is with the cap conflicting with current wholesale rates, they are not likely to add to their problems by ruling that the supplier has to ignore the very real regional cost variations as well.

#2 I really don't think that the regional variations contribute much if anything to bill complexity. The structure and presentation of most energy company bills could be a lot better for sure, but the quotations that a customer will receive before committing to a tariff are always customised to match their region and so are directly comparable.

[Deleted User]

[Deleted User] said:

Ofgem sets the Cap and the rules so, arguably, the Regulator is all over it. Regional standing charges reflect, in part, the differences in distribution costs across the UK.

Whislt there will be differences, there is no reason they couldn't be averaged out. Also, it doesn't explain, why i get different standing charges from different suppliers for the same infrastructure. The explanation of course being that it makes calculating ones bills that much less clear.

eur0

MWT said:

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.

Thanks. Do you have a link to this information?

eur0

What_time_is_it said:

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?

I couldn't agree more. Continually quoting 'average households' is worthless. Most people just want to know how much they'll pay based on current usage. Just give the unit rates and standing charges then we can all work it out accurately for ourselves.

jimjames

eur0 said:

MWT said:

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.

Thanks. Do you have a link to this information?

https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-if-energy-price-cap-affects-you

You can calculate here http://energy.jj99.co.uk/