Thanks you so much for your clear and concise explanation - very much appreciated
I've commented in other threads (often quite contentiously) and have provoked a backlash from some about the failures that we're now all paying for. Like this one from back on 20/09/2021:
I certainly wasn't the Sage of Omaha, but many of those suppliers listed did in fact fail. I now count myself as being one of the extremely lucky ones because as a result of my own research in early September (I was with Igloo at the time) I made the choice fearful of the coming storm, to pay a bit more at the time and go with the longest fix I could find. Fixing until September 24 with EDF. I'm in the East Midlands, and here's the result of that decision:
Gas
Elec
EDF 3Yr Fix
Price Cap
EDF 3Yr Fix
Price Cap
Standing Charge PPD
26.12
27.2
23.77
44.8
pKwH
3.927
7.28
19.98
27.63
I'm not gloating (although I do have a cheerful grin on my face) but I've learned a lesson from this whole painful fiasco that in future I will never ever ever ever accept a cheap short term deal that maybe looks too good to be true. OFGEM should be held to account for allowing so many unregulated and inexperienced cowboys to enter the supply market in the first place.
Although it could be argued that it was Ofgem's price cap that caused all those smaller companies to go bust !
Maybe a contributing factor - but without the price cap, many would have just continued to use customer advance deposits to fund their ongoing businesses - some of which never made an operating profit - according to the last filed accounts for AVRO, they sold their energy at over 99% cost - hardly a business model built to last - once the cash ran out, they crumbled.
Although it could be argued that it was Ofgem's price cap that caused all those smaller companies to go bust !
Maybe a contributing factor - but without the price cap, many would have just continued to use customer advance deposits to fund their ongoing businesses - some of which never made an operating profit - according to the last filed accounts for AVRO, they sold their energy at over 99% cost - hardly a business model built to last - once the cash ran out, they crumbled.
When I become DG of Ofgem I'll insist on Variable DD or Pay On Receipt of Bill. That'll stop 'em !
New cap, new explainer. Most of it the same as the last one, TBH.
Here is how it works:
Ofgem publish a set of tables here showing maximum annual costs for the standing chage (SC) and for typical users. There are different tables depending on how you pay and whether you have single-rate or multi-rate electricity (eg. E7).
The tables for a dual-fuel, single-rate customer are based on 3100 kWh/yr elec and 12000 kWh/yr gas
If you divide the SC cap by 365 you get the daily SC cap
If you subtract the annual SC cap from the 3100 kWh/yr electric cap, then divide by 3100, you get the kWh price
Ditto for the 12000 kWh gas cap.
In practice there's a little bit of flexibility as suppliers can charge less SC and then bump their kWh rates up proportionately. The hard cap on electric kWh is the cap/3100, and for gas kWh the cap/12000.
Ofgem's published figures don't include VAT so add 5% to whatever you calculate (assuming a residential property).
Here is my own calculation of how the rates work out for each region, including VAT in the final steps:
If you've got Economy 7 or Economy 10 or some other multi-rate tariff, it's more complicated and I can't produce a simple table with rates. See this post for an explanation of why.
Many thanks for the explanation and the tables, the unit costs and daily standing charges shown for my region lines up with the information recenetly supplied by my supplier.
What I'm unclear on is that if I add the costs for each element for a couple of the regions in the table they don't line up with each other and they exceed the price cap of £2069 (i.e. £1971 +5% VAT).
I assumed the price cap was standard across all regions with regions being able to tweak the standing charges and unit costs so long as the overall price cap of £1971 + vat isn't exceeded. Is my undersatnding of the same price cap all regions incorrect?
I assumed the price cap was standard across all regions with regions being able to tweak the standing charges and unit costs so long as the overall price cap of £1971 + vat isn't exceeded. Is my undersatnding of the same price cap all regions incorrect?
As molerat says, the price cap varies by region. £1971 includes VAT and is an average.
By my calculations, the price cap varies between £1937 (East Midlands) and £2015 (North Wales & Mersey).
N. Hampshire, he/him. Octopus Go elec & Tracker gas / Voda BB / Virgin mobi. Ripple WT2 member. 2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 2.5kw inverter. 27MWh generated, long-term average 2.6 Os.
I assumed the price cap was standard across all regions with regions being able to tweak the standing charges and unit costs so long as the overall price cap of £1971 + vat isn't exceeded. Is my undersatnding of the same price cap all regions incorrect?
As molerat says, the price cap varies by region. £1971 includes VAT and is an average.
By my calculations, the price cap varies between £1937 (East Midlands) and £2015 (North Wales & Mersey).
Thanks to both of you for clarifying the averaging of the price cap. this wasn't too obvious from looking at the OFGEM page on price cap..
How for example did you arrive at £1937 for the East Midlands Region?
The headline cap rate is for a dual-fuel customer paying by DD and using 12000kWh of gas and 2900kWh of electricity per year.
Gas. This one is easy, the bill is £926.91 +5% VAT = £973.26
Electricity. This is more difficult, we have the standing charge of £155.56 plus the cost of electricity, which is [29/31 of (£971.23-£155.56)] ie. £763.05 = £918.61 +5% VAT = £964.54
Total £973.26 + £964.54 = £1937.80
Hope you can follow that?
N. Hampshire, he/him. Octopus Go elec & Tracker gas / Voda BB / Virgin mobi. Ripple WT2 member. 2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 2.5kw inverter. 27MWh generated, long-term average 2.6 Os.
Replies
Thanks you so much for your clear and concise explanation - very much appreciated
I've commented in other threads (often quite contentiously) and have provoked a backlash from some about the failures that we're now all paying for. Like this one from back on 20/09/2021:
https://forums.moneysavingexpert.com/discussion/6298311/how-can-so-many-energy-companies-fail-whos-next-avro-igloo-symbio-colorado-neon-reef/p1
I certainly wasn't the Sage of Omaha, but many of those suppliers listed did in fact fail. I now count myself as being one of the extremely lucky ones because as a result of my own research in early September (I was with Igloo at the time) I made the choice fearful of the coming storm, to pay a bit more at the time and go with the longest fix I could find. Fixing until September 24 with EDF. I'm in the East Midlands, and here's the result of that decision:
I'm not gloating (although I do have a cheerful grin on my face) but I've learned a lesson from this whole painful fiasco that in future I will never ever ever ever accept a cheap short term deal that maybe looks too good to be true. OFGEM should be held to account for allowing so many unregulated and inexperienced cowboys to enter the supply market in the first place.
Maybe a contributing factor - but without the price cap, many would have just continued to use customer advance deposits to fund their ongoing businesses - some of which never made an operating profit - according to the last filed accounts for AVRO, they sold their energy at over 99% cost - hardly a business model built to last - once the cash ran out, they crumbled.
2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 2.5kw inverter. 27MWh generated, long-term average 2.6 Os.
2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 2.5kw inverter. 27MWh generated, long-term average 2.6 Os.