Price Cap - why do we put up with this nonsense

Flight3287462

How can this statement ever make any sense:-

The cap will increase by £139 to £1,277 on October 1 but it is predicted it could go up by a further £280 when it is reviewed in April. 

You get similar statements when you look to shift supplier.

I am assuming it is because the vast majority of customers are as thick as mince and can't calculate their costs from the tariff, standing charge and the VAT rate.  But for the rest of these quoted figures are meaningless especially if you have a large house or high usage.

Come on give is the real figures that will allow us to work out how much our energy will cost.

Neil_Jones

Flight3287462 said:

How can this statement ever make any sense:-

The cap will increase by £139 to £1,277 on October 1 but it is predicted it could go up by a further £280 when it is reviewed in April. 

You get similar statements when you look to shift supplier.

I am assuming it is because the vast majority of customers are as thick as mince and can't calculate their costs from the tariff, standing charge and the VAT rate.  But for the rest of these quoted figures are meaningless especially if you have a large house or high usage.

Come on give is the real figures that will allow us to work out how much our energy will cost.

The energy cap is not an all-you-can-eat thing.  It doesn't mean you'll pay £1300 or whatever.  Also it only applies if the customer is basically too idle to sort their own energy out.  The price cap limits the rates a supplier can charge for their default tariffs. These include the standing charge and price for each kWh of electricity and gas.

Dahliaa

I agree there is low clarity.
why they don’t just state this is max price per unit, instead of this is the annual amount per AVERAGE consumer.
Then you need to find out how is the mysterious average consumer defined- what is their annual usage, are they all electric or having gas too, are they economy 7, from there you need to infer how much how much max the unit price would be.
maybe I don’t understand it.

jamei305

Because different tariffs vary on the proportion of cost allocated to the standing charge vs the unit cost, the price cap is based on two levels of usage: zero and 12,000kWh for gas and zero and 3,100kWh for electricity (for single rate meters). You can't back-calculate unit costs because that depends on what the suppliers choose to set the standing charges at.

https://www.ofgem.gov.uk/sites/default/files/docs/2020/08/default_tariff_cap_level_-_october_2020_-_march_2021.pdf

bristolleedsfan

jamei305 said:

Because different tariffs vary on the proportion of cost allocated to the standing charge vs the unit cost, the price cap is based on two levels of usage: zero and 12,000kWh for gas and zero and 3,100kWh for electricity (for single rate meters). You can't back-calculate unit costs because that depends on what the suppliers choose to set the standing charges at.

https://www.ofgem.gov.uk/sites/default/files/docs/2020/08/default_tariff_cap_level_-_october_2020_-_march_2021.pdf

Larger companies  from my analysis have all been sticking to published bench mark rates./charges

Dahliaa

jamei305 said:

Because different tariffs vary on the proportion of cost allocated to the standing charge vs the unit cost, the price cap is based on two levels of usage: zero and 12,000kWh for gas and zero and 3,100kWh for electricity (for single rate meters). You can't back-calculate unit costs because that depends on what the suppliers choose to set the standing charges at.

https://www.ofgem.gov.uk/sites/default/files/docs/2020/08/default_tariff_cap_level_-_october_2020_-_march_2021.pdf

So then the cap at zero usage essentially means max standing charge I would assume.

razord

Dahliaa said:

jamei305 said:

Because different tariffs vary on the proportion of cost allocated to the standing charge vs the unit cost, the price cap is based on two levels of usage: zero and 12,000kWh for gas and zero and 3,100kWh for electricity (for single rate meters). You can't back-calculate unit costs because that depends on what the suppliers choose to set the standing charges at.

https://www.ofgem.gov.uk/sites/default/files/docs/2020/08/default_tariff_cap_level_-_october_2020_-_march_2021.pdf

So then the cap at zero usage essentially means max standing charge I would assume.

Yeh that's how I worked it out... annoying though, you can't just takeaway nil kwh from the 3100 kwh price and divide it by 3100kwh to find a real world cost per kw/h, as in the south west you get 20.57p per kwh, and many variable tariffs are already above that - so I guess it's excluding some fees? Or VAT?

Also, "Other Payment Method" is the first shown table, but "Standard Credit" is second... anyone know which one applies to a direct debit monthly "standard" setup? Other Payment Method is cheaper than Standard Credit

Edit: October price cap is here:  Default tariff cap level: 1 October 2021 to 31 March 2022        

QrizB

Monthly DD is "other", pay on receipt of bill is "standard credit", if I recall correctly.

jimjames

razord said:

Dahliaa said:

jamei305 said:

Because different tariffs vary on the proportion of cost allocated to the standing charge vs the unit cost, the price cap is based on two levels of usage: zero and 12,000kWh for gas and zero and 3,100kWh for electricity (for single rate meters). You can't back-calculate unit costs because that depends on what the suppliers choose to set the standing charges at.

https://www.ofgem.gov.uk/sites/default/files/docs/2020/08/default_tariff_cap_level_-_october_2020_-_march_2021.pdf

So then the cap at zero usage essentially means max standing charge I would assume.

Yeh that's how I worked it out... annoying though, you can't just takeaway nil kwh from the 3100 kwh price and divide it by 3100kwh to find a real world cost per kw/h, as in the south west you get 20.57p per kwh, and many variable tariffs are already above that - so I guess it's excluding some fees? Or VAT?

Presumably optional variable tariffs can be above the cap as can fixed ones. It's just the default standard tariff that has to be at or below isn't it?

bristolleedsfan

razord said:

Dahliaa said:

jamei305 said:

Because different tariffs vary on the proportion of cost allocated to the standing charge vs the unit cost, the price cap is based on two levels of usage: zero and 12,000kWh for gas and zero and 3,100kWh for electricity (for single rate meters). You can't back-calculate unit costs because that depends on what the suppliers choose to set the standing charges at.

https://www.ofgem.gov.uk/sites/default/files/docs/2020/08/default_tariff_cap_level_-_october_2020_-_march_2021.pdf

So then the cap at zero usage essentially means max standing charge I would assume.

  in the south west you get 20.57p per kwh, and many variable tariffs are already above that - so I guess it's excluding some fees? Or VAT?
  

According to Eon Next variable rate quote which is priced to benchmark price cap rates, south west from 1 October

Unit rate	21.61p per kWh
Standing charge	25.66p per day

Bulb  who like to say they are under price cap

Electricity unit rate 21.596p per kWh Electricity daily standing charge 25.65p per day

QrizB

Is this any use to anyone? My own calculations, any errors are mine.

Prices now include 5% VAT.