Is it possible to be charged over the £2500 price guarantee even if you have Ofgem typical usage?

[Deleted User]

BooJewels said:

Is it any wonder that people are confused - I just received an email from British Gas about month-end meter readings and that includes this comment:   

"The prime minister recently announced the Energy Price Guarantee – meaning that from 1st October, the cost of energy for the average home will be no more than £2,500 a year for the next two years."

There's nothing massively wrong with that, it's just simplified.

Seems the problem is that everyone thinks that they are 'the average home' no matter what they do.

BooJewels

Deleted_User said:

BooJewels said:

Is it any wonder that people are confused - I just received an email from British Gas about month-end meter readings and that includes this comment:   

"The prime minister recently announced the Energy Price Guarantee – meaning that from 1st October, the cost of energy for the average home will be no more than £2,500 a year for the next two years."

There's nothing massively wrong with that, it's just simplified.

Seems the problem is that everyone thinks that they are 'the average home' no matter what they do.

It's not factually incorrect, but the insidious repetition of the same over-simplification (I've heard it twice or more on TV today) is just brainwashing people into only hearing "no more than £2,500 per year".  I feel that some of these organisations have a responsibility to be a bit more careful in how they impart this sort of detail.  Or maybe it serves energy companies well enough to allow users to use energy with abandon, until the penny drops.

tifo

MWT said:

tifo said:

alleycat` said:

Yes it's possible, although not by a huge amount.

I believe the variations I've seen are about £50 either way depending on the region you live in.

Not really, i've got my projections and it's about £3,200 a year for gas and electricity. I'm with different suppliers.

Your use is not going to be the 2,900kWh/12,000kWh electric/gas though is it?

The £2,500 figure is just the average of all the regions for someone with that specific use, paying by DD.

Individual estimates could be thousands higher or even lower based on their individual usage estimates.

It isn't a cap on everyone's bills...

I know this, my point was it's not £50 either way even taking into account region.

[Deleted User]

tifo said:

MWT said:

tifo said:

alleycat` said:

Yes it's possible, although not by a huge amount.

I believe the variations I've seen are about £50 either way depending on the region you live in.

Not really, i've got my projections and it's about £3,200 a year for gas and electricity. I'm with different suppliers.

Your use is not going to be the 2,900kWh/12,000kWh electric/gas though is it?

The £2,500 figure is just the average of all the regions for someone with that specific use, paying by DD.

Individual estimates could be thousands higher or even lower based on their individual usage estimates.

It isn't a cap on everyone's bills...

I know this, my point was it's not £50 either way even taking into account region.

But the OP (to whom alleycat was responding) specifically stated that at typical usage their rates didn't come out to the cap.  It's not actually £50 max difference, as my later post pointed out, but it was nothing to do with them using more.

MalC4

Thank you everyone for your comments.
I think my original post does prove that there is still a lot of confusion out there, largely due to the misnomer "price cap". 

Thank you SparkyGrad for your support and pointing out that I specifically said 'typical usage' 

I'm not suggesting that I'm expecting to pay a maximum (capped bill) of £2,500 no matter how long I run my central heating for this winter or if I wanted to start up a cake baking company from home 
Central heating and cakes aside, I know that my gas usage is above average and I will have to pay for what I use. I totally understand the concept but want to clarify my point as I'm not sure that everyone understood my original post.

As per the link provided above, the gov.uk website says "a typical UK household will pay no more than £2,500 a year". For typical UK household I read, 'use Ofgem's own typical usage figures' and so I took the unit price (incl. VAT) for gas and multiplied it by (Ofgem's) 12,000 kWh; I did the same for the electricity unit price multiplied by (Ofgem's) 2,900 kWh and added in the 365 days of both standing charges and the total was over £2,500. 

I know that nobody will have typical usage, but Ofgem have to use a benchmark against which price caps or price guarantees are made.
However, here's the point. I used the Ofgem typical usage figures and the energy provider's unit and standing charge prices to calculate how much my (hypothetical) 'typical' house in South Wales will be charged over a year. As it results in a figure that is more than the £2,500 price guarantee, then that means that every single household (with the same provider, no matter how much energy they use) in South Wales will be charged using the same erroneous per kWh unit prices and/or standing charge/day rates. Which means that they will all be overcharged for the energy they use and it is contrary to the agreed guarantee. 

Let me play this out and assume that we are not being misled and the energy provider is in fact aiming to overcharge me. Can you imagine if that was just £15 more per year above the £2,500 figure and that same energy provider had 100,000 customers. That would mean the overcharge will gain them £1.5 million more than they are permitted to charge. Consider the same thing in other regions of the country for all their other customers and they will unscrupulously benefit from our misery on top of now windfall tax charges. 

So you see, this is why I need to know if there is actually anything written anywhere by the government or Ofgem that states that the £2,500 figure is not actually a guarantee even in the event that you did have typical usage. Of course, that would mean that we're all being lied to

[Deleted User]

As we pointed out earlier, there are several documents published by OFGEM that show the cap is different in every region and for every payment method.  We don't have the official copy of these for the newest cap yet, but the guidance has been that similar methods apply.  What we have seen is the supplier's copy of these caps.

The energy provider is not attempting to overcharge you. 

You are not being lied to. 

Press releases are a simplified version of how it actually works.

MWT

MalC4 said:

So you see, this is why I need to know if there is actually anything written anywhere by the government or Ofgem that states that the £2,500 figure is not actually a guarantee even in the event that you did have typical usage. Of course, that would mean that we're all being lied to

This is what the official factsheet says:

"The Energy Price Guarantee will reduce the unit cost of electricity and gas so that a typical household in Great Britain pays, on average, around £2,500 a year on their energy bill, for the next 2 years, from 1 October 2022."

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

That is accurate and correct, as it states "on average".

[Deleted User]

MWT said:

MalC4 said:

So you see, this is why I need to know if there is actually anything written anywhere by the government or Ofgem that states that the £2,500 figure is not actually a guarantee even in the event that you did have typical usage. Of course, that would mean that we're all being lied to

This is what the official factsheet says:

"The Energy Price Guarantee will reduce the unit cost of electricity and gas so that a typical household in Great Britain pays, on average, around £2,500 a year on their energy bill, for the next 2 years, from 1 October 2022."

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

That is accurate and correct, as it states "on average".

Clearly, the PM hasn’t received a copy. I see that ML is still paddling against the tide:

BooJewels

Out of curiosity, I worked mine out - I'm in the north west, so one of the slightly cheaper regions - and mine came to £2,465.67.  So perhaps the average of mine and @MalC4 numbers would come in around the published average of averages of £2,500.

ETA:  Just to clarify, that's not my personal projected use, but what I'd pay in total for the cited averages of 12,000kWh gas and 2,900kWh electricity.

[Deleted User]

BooJewels said:

Out of curiosity, I worked mine out - I'm in the north west, so one of the slightly cheaper regions - and mine came to £2,465.67.  So perhaps the average of mine and @MalC4 numbers would come in around the published average of averages of £2,500.

ETA:  Just to clarify, that's not my personal projected use, but what I'd pay in total for the cited averages of 12,000kWh gas and 2,900kWh electricity.

The Octopus tables actually show the caps for each region and payment type (but don't show them correctly for E7).

https://octopus.energy/blog/how-the-energy-price-guarantee-works/