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Understanding Ofgem price cap

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  • garrehsponges
    garrehsponges Posts: 20 Forumite
    Fifth Anniversary 10 Posts Name Dropper
    MWT said:
    Actually looking closer, that BG tariff is for the Eastern region and your calculator is set to South East...

    That accounts for the small difference as Eastern is capped at £0.32 higher than South East
    Interesting. I used this page: https://www.britishgas.co.uk/GetAQuote/tariff-information/tariffs/standard-variable/tariff-rates

    It asks for your postcode, so I assume based on my postcode we are South East (Essex)

    In any case, unit rate differences between Eastern and South East are miniscule - seems BG are still overcharging above cap.
  • Curiousgirl1
    Curiousgirl1 Posts: 325 Forumite
    100 Posts Name Dropper
    no they’re not. BG prices include 5% VAT, the calculator prices don’t  
  • MWT
    MWT Posts: 10,197 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    garrehsponges said:

    In any case, unit rate differences between Eastern and South East are miniscule - seems BG are still overcharging above cap.
    ... and as per my earlier post, the 'error' was also miniscule, £0.30...

    So it is consistent with the cap difference between South East and Eastern.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Eighth Anniversary 100 Posts Combo Breaker
    edited 30 September 2021 at 8:21AM
    MWT said:

    ... almost...
    The cap is on the standing charge and the total cost (including standing charge) for a typical consumer which is considered to be 3100kWh of electricity and 12,000 kWh of gas.
    So there is not a precise cap on the unit charge as it depends what the supplier sets the SC to be...



    Hi! I'm slightly confused. In a later post you link to a table on OFGEM's site (which i can't open as it's an xlsx file), but there are also other tables on OFGEMS site which detail for each region, the total price 12000\2900 for gas/lec, which can then be extrapolated to unit price, but also the total price for the SC for said amount of gas/lec, which can then also be extrapolated.

    So the max SC appears to be actually defined and capped. Is this not the case?
  • MWT
    MWT Posts: 10,197 Forumite
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    DeletedUser 

    So the max SC appears to be actually defined and capped. Is this not the case?
    Yes, the SC is capped, it is the unit price which is not directly capped.


  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Eighth Anniversary 100 Posts Combo Breaker
    Again, from the tables provided by OFGEM, the capped price for 12000kwh of gas, and 2900kwh of lec appears to defined, and therefore the unit price is also capped?




  • zagfles
    zagfles Posts: 21,404 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    DeletedUser said:
    Again, from the tables provided by OFGEM, the capped price for 12000kwh of gas, and 2900kwh of lec appears to defined, and therefore the unit price is also capped?




    It's 3100kwh for electric.
    So AIUI, take gas, "other payment method" (assume that includes DD), and North West region
    Max SC (ie nil kwh) = £90.81 a year, ie 24.879p/day
    Max total for 12,000 kwh = £552.92
    If supplier sets max SC, then max unit rate = (552.92-90.81)/12000 = 3.8509 p/kwh
    If supplier sets zero SC, then max unit rate = 552.92/12000 = 4.6077 p/kwh
    If supplier sets SC somewhere between zero and max, the max unit rate will be somewhere between the above and can be worked out as (552.92 - annual SC)/12000

  • MWT
    MWT Posts: 10,197 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    DeletedUser said:
    Again, from the tables provided by OFGEM, the capped price for 12000kwh of gas, and 2900kwh of lec appears to defined, and therefore the unit price is also capped?
    zagfles has given you the worked examples.
    People keep asking for a list showing the unit price cap and as zagfles example shows, you can't answer that question without knowing what the SC is...
    Hence why I have said it is indirectly capped.
    A lot of suppliers seem to be maximising the SC this time so the result is the unit price will be capped at the lower end of the range, but this is not good news for those who consume below the 'typical' 3100kWh.




  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Eighth Anniversary 100 Posts Combo Breaker
    edited 30 September 2021 at 11:45AM
    zagfles said:
    DeletedUser said:
    Again, from the tables provided by OFGEM, the capped price for 12000kwh of gas, and 2900kwh of lec appears to defined, and therefore the unit price is also capped?




    It's 3100kwh for electric.
    So AIUI, take gas, "other payment method" (assume that includes DD), and North West region
    Max SC (ie nil kwh) = £90.81 a year, ie 24.879p/day
    Max total for 12,000 kwh = £552.92
    If supplier sets max SC, then max unit rate = (552.92-90.81)/12000 = 3.8509 p/kwh
    If supplier sets zero SC, then max unit rate = 552.92/12000 = 4.6077 p/kwh
    If supplier sets SC somewhere between zero and max, the max unit rate will be somewhere between the above and can be worked out as (552.92 - annual SC)/12000


    Ah, now i see what you're saying. But, are you sure about the Lec usage, cos i'm sure somehere on their site it states that  'typical' Lec usage is 2900kwh?

    My understanding was that it was 'revised' in Jan 2020 down 'from' 3100 'to' 2900. Did this not take place? I know it was under review, but i find the OFGEM website so difficult to navigate directly that i gave up! Elsewhere ie 'OVO' use the 2900 figure.



    Ta.


  • zagfles
    zagfles Posts: 21,404 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    DeletedUser said:
    zagfles said:
    DeletedUser said:
    Again, from the tables provided by OFGEM, the capped price for 12000kwh of gas, and 2900kwh of lec appears to defined, and therefore the unit price is also capped?




    It's 3100kwh for electric.
    So AIUI, take gas, "other payment method" (assume that includes DD), and North West region
    Max SC (ie nil kwh) = £90.81 a year, ie 24.879p/day
    Max total for 12,000 kwh = £552.92
    If supplier sets max SC, then max unit rate = (552.92-90.81)/12000 = 3.8509 p/kwh
    If supplier sets zero SC, then max unit rate = 552.92/12000 = 4.6077 p/kwh
    If supplier sets SC somewhere between zero and max, the max unit rate will be somewhere between the above and can be worked out as (552.92 - annual SC)/12000


    Ah, now i see what you're saying. But, are you sure about the Lec usage, cos i'm sure somehere on their site it states that  'typical' Lec usage is 2900kwh?

    My understanding was that it was 'revised' in Jan 2020 down 'from' 3100 'to' 2900. Did this not take place? I know it was under review, but i find the OFGEM website so difficult to navigate directly that i gave up! Elsewhere ie 'OVO' use the 2900 figure.



    Ta.


    It says 3100 in the price cap document you linked above, that's what I used.

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