Ofgem to Review Energy Price Cap

Former_MSE_James_F

The energy price cap, which governs the maximum households can be charged per unit of gas and electricity, is to be reviewed as wholesale prices soar. Energy regulator Ofgem has today written an open letter to suppliers saying that it will look at the methodology used to determine the new cap due to take force in April 2022. 

Read the full story here:
'Household energy price cap to be reviewed as gas and electricity prices soar'

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Consumerist

Is this news? I thought the tariff cap was due for review in April anyway.

Confused.

Edit

The price cap currently changes twice a year; in April and October. The current cap, which was announced on 6 August and took force on 1 October, rose sharply by 12% (£139/yr on average) compared to the previous cap, and means the maximum households on a standard variable tariff now pay is £1,277/yr on average.

This statement is misleading. The "maximum" only applies to those with consumption of 3,100 kWh electricity and 12,000 kWh gas annually.

dbks

Consumerist said:

Is this news? I thought the tariff cap was due for review in April anyway.

Confused.

The price cap was always due to be reviewed, but this news relates to the change in methodology used to determine that new cap

savers_united

They are pushing for a quarterly review instead of the current twice yearly. So prices more quickly reflect the actual wholesale price. 

pokora

savers_united said:

They are pushing for a quarterly review instead of the current twice yearly. So prices more quickly reflect the actual wholesale price. 

Always up and for their benefit.

MWT

pokora said:

savers_united said:

They are pushing for a quarterly review instead of the current twice yearly. So prices more quickly reflect the actual wholesale price. 

Always up and for their benefit.

Over the last 5 years the cap has gone down on 3 occasions, and when suppliers are being forced to sell below cost it is hard to argue that they don't have a point...

patden

My energy monthly cost is going from £98 to £243 per month. Should I revert to variable flexible. I’m with octopus 

MWT

patden said:

My energy monthly cost is going from £98 to £243 per month. Should I revert to variable flexible. I’m with octopus 

Would need a bit more detail to comment and this would be better in its own thread, I suggest you start a new one and tell us which tariff you were on and which one you are being offered.

rsmithwhite

I was on Green Network Energy until 10 May 2021 on their "Welcome GNE Variable V5" DD tariff and paying £61per month.  On that date my provider was transferred to EDF.  I was on a tariff called "Welcome GNE Variable v5 (E7)" on DD and continued to pay £61 per month.  My latest bill from EDF, dated 4 Dec 2021, shows that this tariff was changed to "Deemed Economy 7" tariff on 2 Oct 2021, also on DD, at significantly increased unit rates to the extent that EDFs review of the monthly DD is that the monthly payment should be increased to £173 as from 7 Jan 2022.  This is an approximate increase of 80% on the Day rate and 35% on the Night rate.

Is this allowed with the current price cap policy?

bristolleedsfan

rsmithwhite said:

I was on Green Network Energy until 10 May 2021 on their "Welcome GNE Variable V5" DD tariff and paying £61per month.  On that date my provider was transferred to EDF.  I was on a tariff called "Welcome GNE Variable v5 (E7)" on DD and continued to pay £61 per month.  My latest bill from EDF, dated 4 Dec 2021, shows that this tariff was changed to "Deemed Economy 7" tariff on 2 Oct 2021, also on DD, at significantly increased unit rates to the extent that EDFs review of the monthly DD is that the monthly payment should be increased to £173 as from 7 Jan 2022.  This is an approximate increase of 80% on the Day rate and 35% on the Night rate.

Is this allowed with the current price cap policy?

Until 30 September you were on effectively subsidised by Edf tariff rates. hence why big increase after that

"You’ll move to an EDF tariff, which is different from the one you had with Green Network Energy. We guarantee that all customers will see a price decrease versus your current tariff until 30 September 2021"

rsmithwhite

Many thanks for your reply.  So this is OK for EDF to increase the tariff rates?