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

Steve_79_P

Not according to this article, they will continue to set it so gov know what the differences are?

https://www.dailyrecord.co.uk/lifestyle/money/ofgem-energy-price-cap-announcements-27952014

The_Green_Hornet

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)?

I would imagine that everyone will get the same discount.

mrsmac59

If I get a reduction I will look upon it as a bonus.I am one of those who hedged my bets and fixed end of May after price cap increase of April, didn't want huge hit of October hike,so my fix was higher than  price cap rates (32pkwh 56pdsc)(approx)£75 exit.Not as high as greedy energy companies hiked prices too.

wrf12345

If I take £100 off the £400 freebie to cover the increase in standing charges, then take £100 off the electric cost and £200 off the gas cost, as a very low user the new govn cap unit rates take me back to where I was before prices went crazy, so the govn has it about right for people who are willing to cut their usage. If people carry on as normal then they will pay a lot more but not as much as the market would have otherwise dictated. 

SnakePlissken

Not sure what the implications of this will be long term on our bills? ...

However, the Resolution Foundation has warned that the policy risked “delaying but locking in” windfall gains. There are concerns that the government negotiating team, led by the former head of the vaccines taskforce, Madelaine McTernan, is in a weak position as it will need to convince generators to forgo high short-term prices.

Cant post the link, but source is guardian on centrica announcement 

"British Gas owner plans to cap profits to cut energy bills"

[Deleted User]

SnakePlissken said:

Not sure what the implications of this will be long term on our bills? ...

However, the Resolution Foundation has warned that the policy risked “delaying but locking in” windfall gains. There are concerns that the government negotiating team, led by the former head of the vaccines taskforce, Madelaine McTernan, is in a weak position as it will need to convince generators to forgo high short-term prices.

Cant post the link, but source is guardian on centrica announcement 

"British Gas owner plans to cap profits to cut energy bills"

https://www.theguardian.com/business/2022/sep/10/british-gas-cap-profits-cut-energy-bills-centrica-electricity

John_Philip_Howarth

Can the experts on here offer their advice. I am signed up on a fixed contract from 2nd October of electric 38.37p/kWh and s/c 42.24 p per day, and gas 9.84p/kWh and s/c 27.22 p per day. On my usage this works out at a total of £2760.40 per year which is less than the EPG figures. Will my unit rates be adjusted with any discount?

[Deleted User]

John_Philip_Howarth said:

Can the experts on here offer their advice. I am signed up on a fixed contract from 2nd October of electric 38.37p/kWh and s/c 42.24 p per day, and gas 9.84p/kWh and s/c 27.22 p per day. On my usage this works out at a total of £2760.40 per year which is less than the EPG figures. Will my unit rates be adjusted with any discount?

Looks like you're one of the 'edge cases' that we're still debating - some evidence to say yes you will get exactly the discount stated, some to say that you will get a discount but not as much, some to say you won't get any.

alibean121

I’m still really confused. I count myself as an intelligent person with strong reading comprehension but that website leaves a lot to be desired.

superpang

"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."

This is very poorly worded, but those numbers are close to the difference between the previously proposed price cap and the new one, so it's surely a discount that will only apply to those who have fixed at, or higher than the previously stated Oct cap. 

I fixed my electricity at 32.66p in June, above the current cap, but that doesn't mean I'm going to get the 17p discount. It means I'm paying 32.66p until next June, then 34p.