What happens to the Energy Price Guarantee in April?

paul_cl

Hello, I'm spent all morning trying to understand this, and I'm confused! 

I understand that the government has introduced the EPG - but is this a reduction in the maximum rate by a set amount, or is it a new price cap?
I understand it will cap unit costs to 34.0p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from 1 October (varying by region).
Does this unit cost stay the same for the next 2 years?

What if the price of fuel goes up even more?

I'm currently on British Gas Exclusive Jul 23v2, with rates of

Unit rates (includes the Energy Price Guarantee discount)

Gas: 10.327p per kWh

Electricity:v33.477p per kWh

Standing charges
Gas: 30.645p per day

Electricity:48.407p per day

BG have emailed suggesting I move to the cheaper Standard Variable

Unit rates

Gas:10.326p per kWh

Electricity:33.476p per kWh

Standing charges

Gas:28.485p per day

Electricity:43.260p per day

This works out slightly cheaper - however if the Standard Variable goes up in price in the new year, then staying on the Fix makes more sense.

I'm going insane with this! I hope the simple answer is - it stays at 10.326p/33.476p for the next 2 years?

luvchocolate

It's fixed for 2 years 
..which means the price Remains the same. 
To be honest I've got little confidence in anything at the moment 

[Deleted User]

paul_cl said:

I understand that the government has introduced the EPG - but is this a reduction in the maximum rate by a set amount, or is it a new price cap?

It’s a new cap for variable tariffs and a discount on fixed tariffs.

paul_cl said:

Does this unit cost stay the same for the next 2 years?

What if the price of fuel goes up even more?

I'm going insane with this! I hope the simple answer is - it stays at 10.326p/33.476p for the next 2 years?

It’s supposed to be the same for two years. Depends how much you trust the next two years of governments not to change it.

Because the discount on fixed tariffs was calculated by comparing the old and new price caps, some people have got the idea that either the prices will change or there will be different discounts in January and/or April. There has been nothing to indicate that this will be true, and personally I can’t see that happening unless the whole EPG is changed.

DE_612183

It's supposed to be for two year, but I can't see them leaving the price at that level - of course they could be hoping that wholesales prices come down in the two years so the level won't actually mean anything

BUFF

Ofgem has moved to calculating caps on a 3-monthly basis rather than previous 6-monthly.
Do you think that the current government/PM will still be in power come next May (when we are out of the high usage Winter months) & if not what may an incoming government decide?

Looking at it there can't be much financial difference at all for you. You do have a legal contract with BG for them to supply at those BG Exlusiv Jul23 rates for the term of the tariff.

P.S. the EPG rates  are subject to the usual regional variation, some will pay more than 34.0/10.3p & some will pay less.

daveaspy

if wholesale rates did come down significantly, would OFGEM reduce the cap below the current "2 year cap" or are we all now tied in to this high price when our current cheaper fixes end?

[Deleted User]

daveaspy said:

if wholesale rates did come down significantly, would OFGEM reduce the cap below the current "2 year cap" or are we all now tied in to this high price when our current cheaper fixes end?

That would depend on the contractual arrangements in the background and we don’t know those.

The government could always use it as a way of recovering the expense by using a reverse discount.

facade

I noticed that when she was bidding a tearful farewell to Kwarteng, The Iron Weathercock was very careful to say that the EPG was lowering families energy bills this Winter.

Read into that what you like

Chrysalis

Its a political promise not a contract so bear that in mind. 

littleteapot

Chrysalis said:

Its a political promise not a contract so bear that in mind. 

Which is why I have stayed on EDF's April 2024 fix despite the face that the 'reduced' rates on that are not as good as their SVR EPG rates for my balance of E7 usage.

See screenshot below for comparison of EDFs SVR and the April 2024 fix. The night rate is much lower on the SVR/EPG which would benefit us as we use about 75% night rate. But I simply don't trust the government not to U-Turn on the EPG or raise the EPG rates next year.

SAC2334

Putins dead, war over. World awash with gas, every thing is back to normal ,, oil price drops .

 Why can t we return to the rates that good old Symbio and Zog were charging before the pandemic .. in my case 3.4 p kwh gas and 13 p kwh electric . ?
What we a being charged now is a relief from the Cornwall Insight nightmare prediction  prices but its still ludicrously expensive by historic prices. It should drop considerably IMO