Where do Ofgem get their average user consumption from

savers_united

With prices rising more and more people I am speaking to are mentioning how much their energy costs or DD have increased the past couple of months or ask me what I am paying and how much its increased. 

People who up until now have never mentioned their energy costs.

What stood out for me, no one so far has mentioned paying anywhere near the price cap of £1200 odd a year or £100 odd a month.

They all seem to have been paying between £80 - £100 previously on a fixed deal but now are being asked to pay between £145 - £180 per month based on actual usage of the previous 12 months. 

I understand there are lots of variables some people are Elec only and different tariffs but it feels like most are now on the price cap with their fixed deals having ended. Its quite a broad range of people from elderly couples to families.
Even those who have said they are still on a fixed deal since last year are worried by the prices rise with comments like I am already paying £120 a month.

£120 a month at last years prices, so who are these average users that Ofgem base the cap on who are at the moment with the recent increase still paying £100 per month and is it really reality as I guess this average and low users are small highly insulated new build type properties, a two up and two down affair with little room to swing a cat, whereby much of the UK housing stock is older more established high ceiling type properties that most would struggle to sufficiently heat and power in line with Ofgems average user figures. 

Verdigris

I wish they'd drop the average (there are three averages, btw) annual cost, it isn't really helpful. It is just a quick way to illustrate in a few words, on a news bulletin, whether prices are going up or down.

The only figures that means anything is your actual consumption, in kWh, the kWh price and the daily charge. That will be different for every household.

QrizB

savers_united said:

With prices rising more and more people I am speaking to are mentioning how much their energy costs or DD have increased the past couple of months or ask me what I am paying and how much its increased. 
People who up until now have never mentioned their energy costs.
What stood out for me, no one so far has mentioned paying anywhere near the price cap of £1200 odd a year or £100 odd a month.

The average is the average. Your own circle of friends are not representative.

There are plenty of people on this forum who use near- or below-average amounts of energy. I'm one; we're a 4-person household in a 3-bed semi and we use just under the average 12000kWh/yr of gas. (Our electricity use is also below average but that's skewed by our solar panels, we'd be a bit above average without them.)

savers_united

I get all that, but we should now have better ways of presenting average Gas and Elec usage. Surely all energy suppliers hold this information and could give Ofgem actual usage, maybe as more people move to Smart meters this data will become more accurate.

Why can't Ofgem provide the capped KWh rate for both Gas and Elec and SC that suppliers cannot exceed. 

A 3-bed house is considered to be a medium energy usage household. According to Ofgem, medium energy usage households consume around 12,000 kWh of gas and 3,100 kWh of electricity every year. 

So its not hard to understand if you do fit into this medium user bracket your going to pay for Elec 3100 * per KWh + Sc =
Same for Gas

Then do the same for a low use example and high user example. 

This average £1200 per annum serves no purpose, my orignal point where do they get the data from to determine the average user. 

Many people who I would class an average users, smallish 3 bed semi, 1 child, working all day. Are seeing their bills increase to between £160-£180 a month, on a capped tariff, that is £60- £80 per month more than the advertised cap average. Now I understand how usage and rates work and I can assure you they are not paying excess amounts with lots of credit. So who are these average users, I am struggling to find anyone who I think fits into this average bracket who is paying £100 a month on a capped variable, in fact no one is paying anywhere near the £1200 a year on this particular tariff only person so far lives on their own in a 2 bed, 2005 built link house and now pays £85 a month up from £62.
But I would say far from your typical average household. 

UnclaimedEnergy

savers_united said:

I get all that, but we should now have better ways of presenting average Gas and Elec usage. Surely all energy suppliers hold this information and could give Ofgem actual usage, maybe as more people move to Smart meters this data will become more accurate.

I think you're overestimating how good suppliers data is.

They normally get their EACs from industry flows anyway which Ofgem would have access to.

If anything though, the medium EAC is potentially too low.

Based on customer numbers and usage, Avro Energy customers were using on average 4MWh a year (4,000kWh)

MWT

savers_united said:

Why can't Ofgem provide the capped KWh rate for both Gas and Elec and SC that suppliers cannot exceed. 

Because that would remove the flexibility for competition between suppliers, and choice by consumers, on the basis of low vs high use changing the balance between standing charge and unit price.

If you specifically cap both components then there is no room to recover a lower standing charge in higher unit costs for example.

So capping the total bill and the standing charge still leaves flexibility in the system under normal market conditions, but right now you don't see much difference as the cap is below the economic cost of supply.

Ultrasonic

Whilst it may be interesting where the average use figure comes from it is largely academic, since even if it isn't accurate it still effectively limits costs to everyone.

For info. my own use is about half the quoted typical electricity use and about a third for gas (as a single occupant of a three bedroom detached house).

molerat

savers_united said:

Why can't Ofgem provide the capped KWh rate for both Gas and Elec and SC that suppliers cannot exceed.

Because there isn't one.  The cap is on the standing charge and maximum total at the set kWh.  There is a lot of wiggle room for suppliers to maximise income from their customers known usage patterns.