Energy Price Guarantee (announced 8 Sep): initial reaction & questions

[Deleted User]

Mstty said:

DerwentMailman said:

The numbers are in the updated HMG support facts (updated today sometime)

https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022

Still so badly worded my added words in bold is what I think they mean.

If not people that that fixed electricity at over 34p electricity and 10.3p gas get 17p off elec and 4.2kwh off gas but those that fixed on or below those prices get zilch.

If you’re on a fixed tariff

If you’re on a fixed tariff at a higher rate caused by recent energy price rises, your unit prices will be reduced by up to 17p/kWh for electricity and 4.2p/kWh for gas.

These unit prices have been passed to suppliers to ensure that they are used to calculate bills on time for 1 October.

Totally agree that at face value the value of the unit rates for someone on a fixed tariff could be below the October 1st SVT tariffs unless those key words up to have been accidentally missed out.  I'd go even further if this is what they mean

Maybe the section on fixed tariff should state; (****MY INSERTIONS IN BOLD*****)

If you’re on a fixed tariff at a higher rate than the October 1st SVT rates caused by recent energy price rises, your unit prices will be reduced by up to 17p/kWh for electricity and 4.2p/kWh for gas (but taking them no lower than the October 1st SVT rates)

Chrysalis

[Deleted User] said:

Mstty said:

DerwentMailman said:

The numbers are in the updated HMG support facts (updated today sometime)

https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022

Still so badly worded my added words in bold is what I think they mean.

If not people that that fixed electricity at over 34p electricity and 10.3p gas get 17p off elec and 4.2kwh off gas but those that fixed on or below those prices get zilch.

If you’re on a fixed tariff

If you’re on a fixed tariff at a higher rate caused by recent energy price rises, your unit prices will be reduced by up to 17p/kWh for electricity and 4.2p/kWh for gas.

These unit prices have been passed to suppliers to ensure that they are used to calculate bills on time for 1 October.

Totally agree that at face value the value of the unit rates for someone on a fixed tariff could be below the October 1st SVT tariffs unless those key words up to have been accidentally missed out.

Yep, I think thats what will turn out to be the case.

mmmmikey

It doesn't say anything about fixes on lower than the new cap which could either mean they don't get a further discount, or just that they haven't said anything yet. Although I suppose you could take "higher rate caused by recent energy price rises" to mean almost anything and it could exclude all tariffs fixed below the cap.

They may have looked at the tariffs and defined this in a way that only folk with fixes a fair bit higher than the cap will get the discount - i.e. how recent is recent? So might be accurate and complete but not (quite!) as controversial as suggested above?

Mstty

mmmmikey said:

It doesn't say anything about fixes on lower than the new cap which could either mean they don't get a further discount, or just that they haven't said anything yet. Although I suppose you could take "higher rate caused by recent energy price rises" to mean almost anything and it could exclude all tariffs fixed below the cap.

They may have looked at the tariffs and defined this in a way that only folk with fixes a fair bit higher than the cap will get the discount - i.e. how recent is recent? So might be accurate and complete but not (quite!) as controversial as suggested above?

They might as well have noted released this today as it hasn't helped one bit to set the details out clearly and concisely.

mmmmikey

...well not for those on fixes maybe, but at least it's better for those of us on SVR. Can understand your point though.

[Deleted User]

mmmmikey said:

It doesn't say anything about fixes on lower than the new cap which could either mean they don't get a further discount, or just that they haven't said anything yet. Although I suppose you could take "higher rate caused by recent energy price rises" to mean almost anything and it could exclude all tariffs fixed below the cap.

They may have looked at the tariffs and defined this in a way that only folk with fixes a fair bit higher than the cap will get the discount - i.e. how recent is recent? So might be accurate and complete but not (quite!) as controversial as suggested above?

In the latest factsheet the fixed tariff section states 'If you’re on a fixed tariff at a higher rate'........and this implies if lower rate then you get no change in tariff.

I'm assuming that they mean at a higher rate than the October 1st SVT.  Could be wrong - infact this is a communications muddle and needs to be clarified by another update I would think.

The_Green_Hornet

It looks like for fixed tariffs above the new EPG they have taken the original October 2022 price cap unit rates and subtracted the Energy Price Guarantee unit rates to determine by how much the fixed tariffs should be reduced.

I assume this is to ensure everyone gets the same government subsidy per unit.

nevill3

I fixed earlier this year to a rate above April's unit rate and have subsequently paid roughly £150 extra this summer on my energy when comparing my fixed prices to the current SVT. I did this because I anticipated the current meltdown would occur. My current fixed unit rate are below the new EPG rates so I will save about £500 per year. 

The Government fact sheet is ambiguous, I "fixed at a higher rate " due to the current energy price crises so technically qualify for the extra discount but I presume they actually meant to say Higher than the new EPG unit rates and will need to clarify this later.

If you’re on a fixed tariff at a higher rate caused by recent energy price rises, your unit prices will be reduced by 17p/kWh for electricity and 4.2p/kWh for gas.

Steve_79_P

"It looks like for fixed tariffs above the new EPG they have taken the original October 2022 price cap unit rates and subtracted the Energy Price Guarantee unit rates to determine by how much the fixed tariffs should be reduced." 

But what happens in January when the OFGEM cap increases again? Gov cap customers will then be getting much more than 17p/4p 'discount', so will fixers get more knocked off their rates from Jan (and again in Apr)?

nevill3

Steve_79_P said:

"It looks like for fixed tariffs above the new EPG they have taken the original October 2022 price cap unit rates and subtracted the Energy Price Guarantee unit rates to determine by how much the fixed tariffs should be reduced." 

But what happens in January when the OFGEM cap increases again? Gov cap customers will then be getting much more than 17p/4p 'discount', so will fixers get more knocked off their rates from Jan (and again in Apr)?

Surely Ofgem will not be setting anymore domestic caps for two years. The government will be paying the difference between the actual cost of supplying the energy and the EPG, to the energy companies. basically the whole UK that was on  SVT is now on a two year fix from October.