Price Cap - why do we put up with this nonsense

ragz_2

British Gas price Promise April 2022, the tariff they have designed for everyone switched from PFP has electricity rates of 21.557p per kwh and 24.038 standing charge (these include vat).
They said it was cheaper than any other variable tariff on comparison sites and is in line with/at the price cap (they said both, in different places).
I'm south east, if that makes any difference. 

hydratoad

jamei305 said:

You can't back-calculate unit costs because that depends on what the suppliers choose to set the standing charges at.

In the majority of cases you can calculate the per unit prices by deducting the nil usage rate and dividing the result by the assumed consumption, as others have indicated. The exemption being multi-rate tariffs (explained below)

razord said:

I guess it's excluding some fees? Or VAT?

Yes, the prices in the tables exclude VAT.

Ofgem have a spreadsheet that shows worked examples for calculating the rates for the January 2019 to March 2019 tariffs. As the methodology for calculating the cap has not changed, you can use this spreadsheet to calculate the rates for the current cap.

Subsidiary document here: https://www.ofgem.gov.uk/publications/default-tariff-price-cap-level-1-january-2019-31-march-2019

Essentially, you need to determine your region, payment type (direct debit is other), and meter/tariff type (single or multi-rate, e.g. Economy 7) and copy-n-paste the noted values from the appropriate price cap table into the green boxes in the spreadsheet on sheets 1 (single rate electricity), 2 (multi-rate electricity) or 3 (gas).

October 2021 price cap tables here: https://www.ofgem.gov.uk/publications/default-tariff-cap-level-1-october-2021-31-march-2022

https://www.ofgem.gov.uk/sites/default/files/2021-08/Default%20tariff%20cap%20level%20-%201%20October%202021%20-%2031%20March%202022.pdf

Note that for multi-rate electricity you will have two unit rates, and as long as they combined costs at the assumed consumption split (58% peak, 42% off-peak) is below the cap, the prices will be compliant. In this case you will need to put in your off-peak rate to confirm that the peak rate is below the cap.

As noted in the spreadsheet, these values exclude VAT. You can multiply the values by 1.05 (105%) to get the VAT inclusive prices. The VAT exclusive price is the one you will see on your bill (as VAT is typically added a separate line item at the end), the VAT inclusive price is the one you will see on comparison websites and on the tariff information labels (TILs).

The price cap only applies to default tariffs that you do not explicitly agree to. These are what you roll onto at the end of your fix, or a "deemed" tariff (e.g. when you first move into a new property, or a force switch due to your supplier going bust). Fixes can be higher, and in the current market many (most) are. It is also worth noting that some suppliers, for example Ecotricity, have derogations (exemptions) from the price cap.

[Edit: corrected link to October 2021 tables.]