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

[Deleted User]

superkoopauk said:

[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? 

I wouldn't expect Elexon to actually be paying discounts to people - suppliers can do that by changing the price in the tariff in their billing system.  I read it more as "someone will need to reconcile these things and work out properly how much the suppliers are owed from the government."  I wouldn't think it's sensible for the suppliers to do that themselves.

camsoft

Deleted_User said:

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.

Who said I'm complaining?

I don't think you understand why cheap overnight tariffs exist. I'm using electricity when it's at its cheapest for the energy provider to buy instead of the unit price being averaged out over a full 24hr period like most tariffs, this is to accommodate EV drivers who need to charge their car.  Most people aren't using much electricity at night so have no need for a time-of-use tariff.

I'm still using the same average amount of electricity to power my home which the price guarantee is based on as everyone else at a non-discounted rate. So I'm not sure how this is different to anyone else other than I have a car to charge which is very costly without using cheap overnight electricity.

To be clear, I'm not expecting a reduction in my 4hr overnight rate or a reduction below the price guarantee on my day rate.

superkoopauk

[Deleted User] said:

superkoopauk said:

[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? 

I wouldn't expect Elexon to actually be paying discounts to people - suppliers can do that by changing the price in the tariff in their billing system.  I read it more as "someone will need to reconcile these things and work out properly how much the suppliers are owed from the government."  I wouldn't think it's sensible for the suppliers to do that themselves.

Or in other words the government doesn't trust suppliers to do it properly .  Wouldn't this all be audited though?  But Elexon didn't need to be involved in the £400 scheme so I don't see why the fact this is volumes based should make any difference (admittedly it is more complex in terms of calculating the amounts).  

[Deleted User]

You could be right about that - I don't think many people would trust the suppliers to do any calculations at this point.

wrf12345

I wish the govn would balance the money used to subsidise retail energy with the new cap by imposing a turnover tax on all companies involved in the energy field (a turnover tax because it is impossible to fiddle the figures to avoid it) rather than expecting the consumer to pay for it in the future by way of higher than market unit rates.

bristolleedsfan

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.

 That's why Octopus have these tariffs, they are returning the savings to the customer instead of their shareholders. 

..............

camsoft

bristolleedsfan said:

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.

 That's why Octopus have these tariffs, they are returning the savings to the customer instead of their shareholders. 

..............

To be fair, Octopus are yet to make a company profit so all their tariffs are loss leaders so not sure this changes anything much.

Chrysalis

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.

Octopus havent commented yet on TOU tariffs, these are "fixed" length contracts with "fixed" caps, so we dont know yet.

QrizB

camsoft said:

Yes, because electricity is cheaper to buy at night.

That particular statement isn't exactly true, and hasn't been true in the UK since we ran down our coal and nuclear plants in favour of CCGTs, wind and solar.

Take a look at the hourly prices at https://www.nordpoolgroup.com/en/Market-data1/#/n2ex/table and you'll see that the cheapest energy is quite often during the daytime rather than the 10pm-8am night period.

Tomorrow, for example, the cheapest slot is from 1400-1500.

bristolleedsfan

camsoft said:

Deleted_User said:

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.

I'm still using the same average amount of electricity to power my home which the price guarantee is based on as everyone else at a non-discounted rate. So I'm not sure how this is different to anyone else other than I have a car to charge which is very costly without using cheap overnight electricity.

To be clear, I'm not expecting a reduction in my 4hr overnight rate or a reduction below the price guarantee on my day rate.

That is your choice, you could move higher powered  appliances to your very cheap off peak rate, Go Faster offers slots from 2130 hours.
34p kWh region average energy price guaranteed rate appears to relate to 1 rate tariffs