MSE News: Energy price cap to rise in January – your energy rates could change slightly

MSE_Andrew

The energy price cap will rise by 20% in January 2023, regulator Ofgem announced this morning – but don't worry, what you pay shouldn't change substantially. While the price cap is set to increase to £4,279/year for a typical household, the Government's energy price guarantee scheme means typical bills will remain at £2,500/year on average until April 2023. 

Read the full story here:

'Energy price cap to rise in January – your energy rates could change slightly, but it is largely meaningless for your bill'

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superkoopauk

"what you pay shouldn't change substantially"

I am interested in what exactly this means.  With all the cap variations over different payment types and meter types it is going to be hard for BEIS to minimise this.

[Deleted User]

superkoopauk said:

"what you pay shouldn't change substantially"

I am interested in what exactly this means.  With all the cap variations over different payment types and meter types it is going to be hard for BEIS to minimise this.

As far as we know so far - it's because no region has actually been capped at £2500 - they've all been slight variations around there based on the underlying OFGEM cap.

If the maths in the background changes the balance between the regions (the variance at the moment is only +-£40 or so), then the same slight variation changes might persist through into the EPG.

Scot_39

When MSE update their reporting - can they consider those on non SVT varaible rates - like those with electric only - or complex metering for their electric - as it's about 4m households (Ofgem report Sep 2020)

And report on what is going to happen in Jan with these plans - and the current level of discounts.

The Ofgem dual rate for my area is going from c48p to c66p - cf the nominal DF DD SR electric going from c52p to c67p.

If the discount (the current 17p+VAT) doesn't increase significantly - many are going to be far worse off.

Spoonie_Turtle

Scot_39 said:

When MSE update their reporting - can they consider those on non SVT varaible rates - like those with electric only - or complex metering for their electric - as it's about 4m households (Ofgem report Sep 2020)

And report on what is going to happen in Jan with these plans - and the current level of discounts.

The Ofgem dual rate for my area is going from c48p to c66p - cf the nominal DF DD SR electric going from c52p to c67p.

If the discount (the current 17p+VAT) doesn't increase significantly - many are going to be far worse off.

The weighed average for standard variable dual-rate tariffs still has to come in at or under the capped rate.  The EPG will still apply to multi-rate tariffs, it's just not possible to report one single set of figures because each supplier calculates the split differently.

If the discount of 17p didn't rise then everyone would be much worse off, increasing the discount is surely the only way to keep people's bills at the current EPG level.

diystarter7

Hi
I'm very confused
We are now pying close to 400 every month

Does this mean with the rise you/MSE/OP mentions and any subsequent rises won't make a big difference to our payments?

BTW - we are with EDF, dual fuel, dd payments and the variable rate

[Deleted User]

diystarter7 said:

Hi
I'm very confused
We are now pying close to 400 every month

Does this mean with the rise you/MSE/OP mentions and any subsequent rises won't make a big difference to our payments?

BTW - we are with EDF, dual fuel, dd payments and the variable rate

Your payments are not your bill.  They are an estimate of your annual bill spread out over 12 months.

The price-per-unit change in January (based on the OFGEM change that this post talks about) can be ignored.

If the amount you use changes, your bills will still change.

April is a different matter - the price per unit will probably rise a noticeable amount for everyone.

Spoonie_Turtle

diystarter7 said:

Hi
I'm very confused
We are now pying close to 400 every month

Does this mean with the rise you/MSE/OP mentions and any subsequent rises won't make a big difference to our payments?

BTW - we are with EDF, dual fuel, dd payments and the variable rate

The Ofgem price cap is what we would be paying without the government guarantee.  The government guarantee is set until the end of March next year.  So as far as I understand, all that should change is how much the government have to pay the suppliers as the difference between the Ofgem cap and the government guarantee. 

I could be missing something though because it's being made out to be more complicated than that.

[Deleted User]

Spoonie_Turtle said:

Scot_39 said:

When MSE update their reporting - can they consider those on non SVT varaible rates - like those with electric only - or complex metering for their electric - as it's about 4m households (Ofgem report Sep 2020)

And report on what is going to happen in Jan with these plans - and the current level of discounts.

The Ofgem dual rate for my area is going from c48p to c66p - cf the nominal DF DD SR electric going from c52p to c67p.

If the discount (the current 17p+VAT) doesn't increase significantly - many are going to be far worse off.

The weighed average for standard variable dual-rate tariffs still has to come in at or under the capped rate.  The EPG will still apply to multi-rate tariffs, it's just not possible to report one single set of figures because each supplier calculates the split differently.

If the discount of 17p didn't rise then everyone would be much worse off, increasing the discount is surely the only way to keep people's bills at the current EPG level.

Actually, the discount doesn't have to rise at all.

The OFGEM cap is rising.  This doesn't mean that any supplier must raise their tariff rates at all, particularly as they couldn't pass any rise on to customers and the money from the government is based on their costs, not their rates.

It was long established that suppliers could have rates under the cap, it's only a cap after all, not a mandated tariff.  If they all just leave their tariffs alone in January, nothing needs to change.

Only exception would be if there are any tariffs still around that were "cap minus X", they would have this rise baked in and would need modification, but I don't know of any that are still standing.

edit:  Having just written this exception, I notice that Saga has written on another thread that they have exactly one of these variable cap tracking tariffs!

superkoopauk

MSE article out on the new discounts.  Very disappointed to see no mention of multi rate tariffs which I think are the worst affected in terms of increases

https://www.moneysavingexpert.com/news/2022/11/government-confirms-energy-bill-discount-for-january--with-bills/

superkoopauk

You can compare and contrast maximum unit rates here (although nothing published for E7).  I think it is safe to say suppliers will price to these so plenty can expect to see an increase.  I fear the E7 increases will be worse

https://www.gov.uk/government/publications/energy-price-guarantee-regional-rates/energy-price-guarantee-regional-rates

https://www.gov.uk/government/publications/energy-price-guarantee-regional-rates/energy-price-guarantee-regional-rates-january-to-march-2023