Price cap.....put simply

maxmycardagain

Is this a maximum a consumers bill may be or carte blanche to jack up the cost per unit?


Ofgem has announced that from 1 October 2022, the price cap for customers on a standard variable tariff will increase to £3,549 if they pay by Direct Debit and to £3,764 if they pay any other way. For customers with a prepayment meter, the price cap will increase to £3,608.

[Deleted User]

maxmycardagain said:

Is this a maximum a consumers bill may be or carte blanche to jack up the cost per unit?


Ofgem has announced that from 1 October 2022, the price cap for customers on a standard variable tariff will increase to £3,549 if they pay by Direct Debit and to £3,764 if they pay any other way. For customers with a prepayment meter, the price cap will increase to £3,608.

This is the maximum that a user may be charged for 12000 kWh of gas and 3100 kWh of electricity including the standing charges, averaged across regions to give a single number for the press.

GingerTim

https://www.moneysavingexpert.com/utilities/what-is-the-energy-price-cap/

MWT

maxmycardagain said:

Is this a maximum a consumers bill may be or carte blanche to jack up the cost per unit?

Neither.

It is a cap on the maximum price per unit and the daily standing charge.

Also keep in mind the numbers you quote are averages across all the regions, and there are specific and different caps for different metering type and payment methods within each region.

QrizB

maxmycardagain said:

Is this a maximum a consumers bill may be or carte blanche to jack up the cost per unit?

Ther'es an explainer of how the cap works in my signature.

(I must update it with the Oct 22 cap numbers.)

Update now complete and link added to sig.

maxmycardagain

12000 kWh of gas (32/day)
3100 kWh of electricity (8.5/day)

is the £3600 the total of energy per year? 

ChaunceyGardiner

maxmycardagain said:

12000 kWh of gas (32/day)
3100 kWh of electricity (8.5/day)

is the £3600 the total of energy per year? 

Yes it is.

[Deleted User]

maxmycardagain said:

12000 kWh of gas (32/day)
3100 kWh of electricity (8.5/day)

is the £3600 the total of energy per year? 

There's actually 2 numbers in each cap, for each fuel.  QrizB has a good explainer but I will put a slightly simplified one here.

Take the Yorkshire region and a direct debit customer.  For gas, the two numbers are £99.02 (nil kWh) and £1775.69 (12,000kWh).  This gives you the maximum standing charge (£99.02 / 365) and the unit price (£1775.69 - £99.02 to get the total cost, then /12000 to get the unit cost).  For electricity, the same numbers are £172.23 (nil kWh) and £1674.32 (3100kWh).

If this customer used 12000kWh of gas and 3100kWh of electricity annually, their bill (if the rates didn't change at all in the year) would be £1775.69 + £1674.32, which then gets 5% VAT added for a total of £3622.51 for the year.

BUFF

Deleted_User said:

maxmycardagain said:

Is this a maximum a consumers bill may be or carte blanche to jack up the cost per unit?


Ofgem has announced that from 1 October 2022, the price cap for customers on a standard variable tariff will increase to £3,549 if they pay by Direct Debit and to £3,764 if they pay any other way. For customers with a prepayment meter, the price cap will increase to £3,608.

This is the maximum that a user may be charged for 12000 kWh of gas and 3100 kWh of electricity including the standing charges, averaged across regions to give a single number for the press.

As per Sparkygrad's post. Change any variable (amount of energy usage or mix, method of payment etc.) & it can change.

QuizB's post is also instructive.  https://forums.moneysavingexpert.com/discussion/comment/79459270/#Comment_79459270

maxmycardagain

so basically, my gas and leccy will cost twice what im paying now on October 1st?

[Deleted User]

maxmycardagain said:

so basically, my gas and leccy will cost twice what im paying now on October 1st?

That entirely depends on what tariff you are on now and what tariff you will be on then.