Guide: What are the price cap unit rates?

MSE_Chris

The energy price cap is misnamed – there’s no cap on how much you pay. If you use more energy, you'll pay more. The cap is on the standing charges and the unit rates for gas and electricity. Yet the cap is usually quoted as an annual figure, based on a typical amount of energy use (currently £1,277/year rising to £1,971/year in April).

But one of the questions we most often get asked is:
What are the price cap unit rates?

Click reply below to discuss. If you haven’t already, join the forum to reply.

ccluedo

Thanks for the info Chris.  I'd like to know why the daily standing charge increase is so much more for electricity than for gas if anyone could enlighten me pls

facade

ccluedo said:

Thanks for the info Chris.  I'd like to know why the daily standing charge increase is so much more for electricity than for gas if anyone could enlighten me pls

Most likely it is to recover the cost of transferring accounts to a Supplier of Last Resort when all those companies failed this year.

They stuck it on the standing charge for electric, to make it so everybody pays their "fair" share, as not everyone has gas, and putting it on unit rates would mean low users would pay less than is "fair".

("fair" depends on your point of view though....)

MSE_Chris

ccluedo said:

Thanks for the info Chris.  I'd like to know why the daily standing charge increase is so much more for electricity than for gas if anyone could enlighten me pls

Hi ccluedo,

We asked that question on Friday and it's due to a number of reasons, mostly due to the costs associated when dealing with providers that go bust (as part of the Supplier of Last Resort process). This has been built into the price cap.

Also, there's been an increase in 'network costs' which also form part of the standing charge and various 'policy costs'. You can see what has effected the price cap rates this time around here:

https://www.ofgem.gov.uk/publications/default-tariff-cap-level-1-april-2022-30-september-2022

I hope that helps.

MSE Chris

MattMattMattUK

facade said:

("fair" depends on your point of view though....)

That is why I hate the usage of "fair" it is entirely subjective and cannot be quantified. 

jrawle

I thought "fair" is fairly straightforward. If you are all-electric, it's fairer to put all the increase on gas. If you are a light user, it's fairer to put it on the unit charge. And if you are a heavy user, it's fairer to put it all on the standing charge. Or at least, that's the gist I get from reading various threads on here discussing standing charges.

IainHL

It's good to find the unit prices stated clearly, thank you. I have struggled for some time to dig that information out of documentation available, with everybody just quoting the £1277 for a "typical" dwelling (another misnomer along the lines of "fair").

So, is a similar table available for Economy 7 tariffs please? (Yes some of us rent property where the heating is still provided by storage heaters!)

molerat

That table is slightly misleading though. The table shows the averages across all regions as is the OFGEM price cap.  There is also no unit price cap, just an inferred unit maximum price based on using the maximum daily charge so suppliers do have some leeway as long as they don't charge more than the standing charge cap and the total price.  E7 is much more complicated as that is based on a 58% day 42% night use and gives the suppliers much more leeway to mess around with the numbers.

https://forums.moneysavingexpert.com/discussion/comment/78958610/#Comment_78958610

double_dutchy

molerat said:

 There is also no unit price cap, just an inferred unit maximum price based on using the maximum daily charge so suppliers do have some leeway as long as they don't charge more than the standing charge cap and the total price. 

Hello molerat,

So, theoretically it's possible for a supplier to have a zero standing charge and therefore a higher unit rate.......but all the current SVRs seem to be set pretty much in line with the maximum SC - are you aware of any suppliers who are charging differently, i.e.  a standing charge significantly below the maximum allowed, and if so what would be the justification for doing that from their perspective?

QrizB

molerat said:

E7 is much more complicated as that is based on a 58% day 42% night use and gives the suppliers much more leeway to mess around with the numbers.

https://forums.moneysavingexpert.com/discussion/comment/78958610/#Comment_78958610

Thanks molerat!

molerat said:

That table is slightly misleading though. The table shows the averages across all regions as is the OFGEM price cap

No offence to @MSE_Chris but this post explains all the same stuff *and* includes a table of regional capped rates:
https://forums.moneysavingexpert.com/discussion/comment/78957887/#Comment_78957887

Navrongo

I notice the average unit rates you quote are not the same as Ofgem (article "Check if the energy price cap affects you" - I'm not allowed to post links). Is this because you include VAT? That seems very sensible. If Ofgem want to show the rates net of VAT, they should make that clear that's what they're doing!