Understanding Ofgem price cap

Thesaltmustflow

MWT 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?

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.

Interesting and helpful last few posts regarding the 'working out figures' of the cap. I'm gonna assume that me as a high end user 21000kwh gas and 6700kwh lec will benefit from a higher SC and lower unit charge? I'm North West area by the way.

MWT

Thesaltmustflow said:

MWT 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?

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.

Interesting and helpful last few posts regarding the 'working out figures' of the cap. I'm gonna assume that me as a high end user 21000kwh gas and 6700kwh lec will benefit from a higher SC and lower unit charge? I'm North West area by the way.

Yes, it is more favourable to higher users.

[Deleted User]

zagfles said:

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

Ah, you are correct! I wonder why they produce all these conflicting figures.

zagfles

Interesting that Igloo, who of course have just gone bust, seemed to have announed a price increase above the cap for electric:

NW region, DD payment, email from them on 31 Aug:

"As a result of wholesale energy price increases, from 1st October 2021, the price you pay for your electricity is increasing from 17.695p/kWh to 21.596p/kWh and the price you pay for gas is increasing from 3.136p/kWh to 3.816p/kWh. Your standing charge will also be changing, electricity is decreasing from 23.320p per day to 23.000p per day and your gas is decreasing from 26.600p per day to 26.000p per day"

So electric on 3100kwh is 3100*0.21596 + 365*0.23 = £753.43, which is well above the price cap, even if the Ofgem document doesn't include VAT (not sure whether it does or not).

Gas was almost smack on 12000*0.03816 + 365*0.26 = £552.82

Wonder if they screwed up and so had to cease trading just before the new (illegal?) prices took effect? They claimed to be £71 below the cap for the average customer, so had they done their sums wrong? Or have I?

[Deleted User]

Well if it was on 2900 Lec would be 710.23 which + 552.82 = 1263.05, and under the cap.

MWT

Agreed, looks like they failed to note that the change to 2900 did not apply to the price cap calculation.

bristolleedsfan

MWT said:

DeletedUser said:

The cap is on the unit rates/standing charge. The price given is for the usage of OFGEMS 'typical' consumer. '12000/2900'.

... 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.

Why do some people on here quote figure of 3100kwh E, elsewhere when Price Cap is explained figure of 2900kwh E gets referred to which matches energy suppliers quote pages for approximate usage for a medium household:

https://www.standard.co.uk/esmoney/energy/what-is-the-energy-price-cap-and-how-does-it-affect-my-bills-b924441.html

"Ofgem relies on benchmark figures for low, medium and high household energy usage. These are known as ‘Typical Domestic Consumption Values’. For a medium user it is 12,000 kWh of gas and 2,900 kWh of electricity"

MWT

bristolleedsfan said:

MWT said:

DeletedUser said:

The cap is on the unit rates/standing charge. The price given is for the usage of OFGEMS 'typical' consumer. '12000/2900'.

... 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.

Why do some people on here quote figure of 3100kwh E, elsewhere when Price Cap is explained figure of 2900kwh E gets referred to which matches energy suppliers quote pages for approximate usage for a medium household:

https://www.standard.co.uk/esmoney/energy/what-is-the-energy-price-cap-and-how-does-it-affect-my-bills-b924441.html

"Ofgem relies on benchmark figures for low, medium and high household energy usage. These are known as ‘Typical Domestic Consumption Values’. For a medium user it is 12,000 kWh of gas and 2,900 kWh of electricity"

Think I've cracked it...

Ofgen did adjust the typical figures down from 3100 to 2900, but they decided not to allow the change to be used for the price cap calculation.

The details are here: https://www.ofgem.gov.uk/sites/default/files/docs/2020/01/tdcvs_2020_decision_letter_0.pdf

[Deleted User]

I linked to that letter at 11.41! (ok i didn't actually read it )

garrehsponges

MWT said:

bristolleedsfan said:

MWT said:

DeletedUser said:

The cap is on the unit rates/standing charge. The price given is for the usage of OFGEMS 'typical' consumer. '12000/2900'.

... 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.

Why do some people on here quote figure of 3100kwh E, elsewhere when Price Cap is explained figure of 2900kwh E gets referred to which matches energy suppliers quote pages for approximate usage for a medium household:

https://www.standard.co.uk/esmoney/energy/what-is-the-energy-price-cap-and-how-does-it-affect-my-bills-b924441.html

"Ofgem relies on benchmark figures for low, medium and high household energy usage. These are known as ‘Typical Domestic Consumption Values’. For a medium user it is 12,000 kWh of gas and 2,900 kWh of electricity"

Think I've cracked it...

Ofgen did adjust the typical figures down from 3100 to 2900, but they decided not to allow the change to be used for the price cap calculation.

The details are here: https://www.ofgem.gov.uk/sites/default/files/docs/2020/01/tdcvs_2020_decision_letter_0.pdf

What the heck.. that's confusing AF! So for my little brain to understand... basically it's "officially" 2900 average usage, but price can stay as high as 3100 usage "legally"? If so, what was even the point in downgrading the usage figures if they don't have any direct correlation on price?