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

Chrysalis

[Deleted User] said:

ZiggyUk said:

Timeblast said:

ZiggyUk said:

I think the government are thinking that, if people signed up for a higher cap, say 65p and 20p, they must have thought that was affordable to them so whilst they will benefit from the discount, as they should due to the fact they'll be paying it back for the next 20 years, this is an affordability crisis.  It's also ease.....it's much easier for energy suppliers to continue with the systems they have and simply plug one or two numbers (kWh gas and kWh electric) each quarter and multiply them by the discount and apply a rebate.....yes, there will be winners and 'losers' but the 'losers' in this case thought they were going to be paying 66p and 20p, for example, and will now be paying 49p and 15.5p so they are winning too.... 

Those people can just move back to variable rate and pay 34p and 10p. British Gas is allowing people on fixed to go back to variable without exit fees, not sure about others. 

So much is being said about unit rates and standing charges but the true horror for me was one of the comments I read that come January, some people on prepayment who last winter would have put £50 on their meter and expect it to last about 12 days would now have it last 2 days    

I guess fixing at these levels and providing targeted support is the best I could hope for given the complexity of the energy market.  I personally would like to see more messaging on people trying to not use electricity at peak times as that is disproportionately affected by gas prices and gas peaker plants load expensive electricity into the system at these times so conserving during 4-7pm could bring the overall national cost down.

Did you notice the most recent news on this?  It seems that offering people a 52p per unit discount isn't considered enough motivation to shift demand away from the peak - the conclusion was that it would need to be somewhere nearer a £2 per unit payment for enough people to change their behaviour.

The tariff was just weird, firstly how many hours a day are peak? Is it just the evenings, or does it include 9-5 working hours (industry peak).

I would do a GO like tariff, but make off peak a lot more than just the dusk hours.  Offer pricing as well thats much better than E7.  Dont make peak more expensive to make off peak cheaper, just make off peak flat out cheaper, but I expect profit concerns are hindering this.

Another problem is for people who work typical office hours, and dont have battery storage its difficult to move energy guzzlers.  Do they start using their oven, hobs, washing machine, showers etc at 2am?

QrizB

Sea_Shell said:

Deleted_User said:

No, that's not actually how it works.  It only counts that way on variable tariffs covered by the price cap - and even then not directly.

But if your rates remain unaltered at a price that included an element of green levies...they will, by default, still be being paid by some, when they have been removed for others.

Doesn't sound right to me.

The £150 of Policy Costs are part of the £1000 reduction in the cap by the EPG.

Consumers don't directly pay the Policy Costs (suppliers pay them per MWh), they're just one of the factors used when calculating the Ofgem cap. Since the Ofgem cap pays no part in calculations of the fixed rates that the suppliers offer, removing that element from the calculation does not in itself affect any other fixed rate tariffs.

Edit:

Or think of it like this. Of the Policy Costs were to double to £300 a year, suppliers wouldn't be able to increase pre-existing fixed tariffs. Why would you expect them to reduce those tariffs of the Policy Costs fall?

Janie2008

QrizB said:

Sea_Shell said:

Deleted_User said:

No, that's not actually how it works.  It only counts that way on variable tariffs covered by the price cap - and even then not directly.

But if your rates remain unaltered at a price that included an element of green levies...they will, by default, still be being paid by some, when they have been removed for others.

Doesn't sound right to me.

The £150 of Policy Costs are part of the £1000 reduction in the cap by the EPG.

Consumers don't directly pay the Policy Costs (suppliers pay them per MWh), they're just one of the factors used when calculating the Ofgem cap. Since the Ofgem cap pays no part in calculations of the fixed rates that the suppliers offer, removing that element from the calculation does not in itself affect any other fixed rate tariffs.

Edit:

Or think of it like this. Of the Policy Costs were to double to £300 a year, suppliers wouldn't be able to increase pre-existing fixed tariffs. Why would you expect them to reduce those tariffs of the Policy Costs fall?

Except they can. My terms and conditions say they can increase the fixed rate to account for increased costs and charges outside their control.

camsoft

Gappychris said:

Hi all,

Im currently on a time of use tariff, fixed for 12 months at the beginning of September. 

Current electricity rates are generally 41p/kWh during the day, with a 6 hour night time rate of 7.5p/kWh. 

Does anyone know if the energy price guarantee will be applicable to my tariff and affect my day rate?

All advise great fully received, thanks. 

In the same boat, I switched to Octopus Go in early September, current day rate is above the Price Guarantee but below the October Price Cap. It sounds like we won't be getting any discount. It doesn't really make any sense, if we had fixed higher than October Price Cap we would have gotten a lower unit rate than we have now. For people saying they will let you cancel and switch to SVR that's all well and good but I'm on a time-of-use tariff because I have an EV so I can't afford to be charging my car at 34.0p/kWh when I'm currently charging at 7.5p/kWh at night.

Obviously, my comment is based on some speculation from reading the Energy bills support factsheet: 8 September 2022 and of course Octopus could just pass on a discount themselves to bring my 40p/kWh day rate down to 34p/kWh so I think we will just need to wait and see. It's clearly a very complex problem to solve especially for Octopus as they have many innovative tariffs.

superkoopauk

Won't mean too much for non industry buffs but interesting.  Not sure why the government cannot administer the scheme themselves direct with suppliers?

https://utilityweek.co.uk/elexon-to-administer-price-freeze-payment-scheme/

[Deleted User]

camsoft said:

Gappychris said:

Hi all,

Im currently on a time of use tariff, fixed for 12 months at the beginning of September. 

Current electricity rates are generally 41p/kWh during the day, with a 6 hour night time rate of 7.5p/kWh. 

Does anyone know if the energy price guarantee will be applicable to my tariff and affect my day rate?

All advise great fully received, thanks. 

In the same boat, I switched to Octopus Go in early September, current day rate is above the Price Guarantee but below the October Price Cap. It sounds like we won't be getting any discount. It doesn't really make any sense, if we had fixed higher than October Price Cap we would have gotten a lower unit rate than we have now. For people saying they will let you cancel and switch to SVR that's all well and good but I'm on a time-of-use tariff because I have an EV so I can't afford to be charging my car at 34.0p/kWh when I'm currently charging at 7.5p/kWh at night.

Obviously, my comment is based on some speculation from reading the Energy bills support factsheet: 8 September 2022 and of course Octopus could just pass on a discount themselves to bring my 40p/kWh day rate down to 34p/kWh so I think we will just need to wait and see. It's clearly a very complex problem to solve especially for Octopus as they have many innovative tariffs.

So you're asking to not only keep a cheap night rate, but also get a discount to your day rate to make it the same as single-rate tariffs?

Doesn't work like that.  You have either have off-peak (cheaper) and peak (more expensive), or you have everything the same.

There might be a new peak/off-peak cap, just like there is one at the moment, we don't know yet.  Unlikely to be 34p peak rate though.

[Deleted User]

superkoopauk said:

Won't mean too much for non industry buffs but interesting.  Not sure why the government cannot administer the scheme themselves direct with suppliers?

https://utilityweek.co.uk/elexon-to-administer-price-freeze-payment-scheme/

Elexon already receive data from every supplier as to how much energy they have supplied - it's part of system balancing.  Given they already have most of the data needed, surely they are a sensible place to do the administration?

camsoft

[Deleted User] said:

camsoft said:

Gappychris said:

Hi all,

Im currently on a time of use tariff, fixed for 12 months at the beginning of September. 

Current electricity rates are generally 41p/kWh during the day, with a 6 hour night time rate of 7.5p/kWh. 

Does anyone know if the energy price guarantee will be applicable to my tariff and affect my day rate?

All advise great fully received, thanks. 

In the same boat, I switched to Octopus Go in early September, current day rate is above the Price Guarantee but below the October Price Cap. It sounds like we won't be getting any discount. It doesn't really make any sense, if we had fixed higher than October Price Cap we would have gotten a lower unit rate than we have now. For people saying they will let you cancel and switch to SVR that's all well and good but I'm on a time-of-use tariff because I have an EV so I can't afford to be charging my car at 34.0p/kWh when I'm currently charging at 7.5p/kWh at night.

Obviously, my comment is based on some speculation from reading the Energy bills support factsheet: 8 September 2022 and of course Octopus could just pass on a discount themselves to bring my 40p/kWh day rate down to 34p/kWh so I think we will just need to wait and see. It's clearly a very complex problem to solve especially for Octopus as they have many innovative tariffs.

So you're asking to not only keep a cheap night rate, but also get a discount to your day rate to make it the same as single-rate tariffs?

Doesn't work like that.  You have either have off-peak (cheaper) and peak (more expensive), or you have everything the same.

There might be a new peak/off-peak cap, just like there is one at the moment, we don't know yet.  Unlikely to be 34p peak rate though.

Yes, because electricity is cheaper to buy at night. That's why Octopus have these tariffs, they are returning the savings to the customer instead of their shareholders. Most people don't use much electricity at night, with EVs and their large batteries these tariffs allow you to use energy when it's cheapest. 

I don't see why this means I'm not entitled to a discount like everyone else. I'm currently paying more than the current price cap in return for 4 cheap hours to charge my car at night.

superkoopauk

[Deleted User] said:

superkoopauk said:

Won't mean too much for non industry buffs but interesting.  Not sure why the government cannot administer the scheme themselves direct with suppliers?

https://utilityweek.co.uk/elexon-to-administer-price-freeze-payment-scheme/

Elexon already receive data from every supplier as to how much energy they have supplied - it's part of system balancing.  Given they already have most of the data needed, surely they are a sensible place to do the administration?

The problem being the volumes used by Elexon for system balancing are very different to the volumes actually billed to customers by suppliers.  And volumes can take 14 months to reconcile  Surely it would be better to cut out the middle man given it is suppliers applying the discount to their billed volumes.  And how will Elexon know which volumes are on variable / fixed tariffs that are above the cap / fixed tariffs that are below the cap? 

[Deleted User]

camsoft said:

[Deleted User] said:

camsoft said:

Gappychris said:

Hi all,

Im currently on a time of use tariff, fixed for 12 months at the beginning of September. 

Current electricity rates are generally 41p/kWh during the day, with a 6 hour night time rate of 7.5p/kWh. 

Does anyone know if the energy price guarantee will be applicable to my tariff and affect my day rate?

All advise great fully received, thanks. 

In the same boat, I switched to Octopus Go in early September, current day rate is above the Price Guarantee but below the October Price Cap. It sounds like we won't be getting any discount. It doesn't really make any sense, if we had fixed higher than October Price Cap we would have gotten a lower unit rate than we have now. For people saying they will let you cancel and switch to SVR that's all well and good but I'm on a time-of-use tariff because I have an EV so I can't afford to be charging my car at 34.0p/kWh when I'm currently charging at 7.5p/kWh at night.

Obviously, my comment is based on some speculation from reading the Energy bills support factsheet: 8 September 2022 and of course Octopus could just pass on a discount themselves to bring my 40p/kWh day rate down to 34p/kWh so I think we will just need to wait and see. It's clearly a very complex problem to solve especially for Octopus as they have many innovative tariffs.

So you're asking to not only keep a cheap night rate, but also get a discount to your day rate to make it the same as single-rate tariffs?

Doesn't work like that.  You have either have off-peak (cheaper) and peak (more expensive), or you have everything the same.

There might be a new peak/off-peak cap, just like there is one at the moment, we don't know yet.  Unlikely to be 34p peak rate though.

Yes, because electricity is cheaper to buy at night. That's why Octopus have these tariffs, they are returning the savings to the customer instead of their shareholders. Most people don't use much electricity at night, with EVs and their large batteries these tariffs allow you to use energy when it's cheapest. 

I don't see why this means I'm not entitled to a discount like everyone else. I'm currently paying more than the current price cap in return for 4 cheap hours to charge my car at night.

Did you complain when you took the tariff out that the day rate was higher than SVR?  Of course not.  You decided that it was worth the higher day rate to get the cheaper night rate, just the same as everyone else on a multi-rate tariff like that.  This hasn't changed.