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

• Posts: 0
Newbie
arjar said:
Not sure how to calculate the weighted average.  My rates on E7 since October have been 40.995p (day); 17.239p (night).  The single rate tariff was 33.726p.

From January the E7 day rate goes up to 45.504p - everything else stays the same for me  (though not sure what happens to the single rate tariff).
Your equivalent single-rate is presently 31.017p and it is going up to 33.633p.  Do you still feel penalised?

If your usage is in a different ratio than the official mathematics uses (42% at night) then you will actually spend a different amount - but that's for you to consider and not them.  If you are using a lot at peak times, perhaps you shouldn't be on E7.
• Forumite Posts: 6,810
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edited 16 December 2022 at 9:42PM
^ weighted average for those rates, if my maths is correct, would be 31.02 (2dp).
[Averaged out over 4200kWh at 58/42 day/night split.]

Edit: new average, with the new day rate, 33.63p.
• Forumite Posts: 19,086
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edited 16 December 2022 at 9:45PM
Octopus update received tonight, and frankly, as a heavy night-rate user, I’ll take that as I was fearing worse.

This is Eastern region.

just calculated that assuming I stick fairly closely to the predicted use, we’ll be paying an average of 28p kWh.
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• Forumite Posts: 80
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OK - Just found a note that suggests that BG's assumed night/day split is 38/62.  If I've dome my sums properly, E7 has been (approximately) 1.76p per unit cheaper than the single rate.  Which is as I would expect - to encourage off peak use.  Doing the same sums with the new higher day rate, the difference is now minus 1.05p for E7 - which is consistent with the advice in my notes that I would in future be (slightly) better off moving over to the single rate.

I assume this change is so E7 customers cease to get  a slight advantage from the pricing structure - which seems rather perverse at a time when National Grid are proposing to incentivise reduced peak time use.  But what do I know - just that my bill is, unexpectedly, about go up again.
• Posts: 0
Newbie
The change is simply a mathematical artefact of the way the government structured the EPG.

It is not designed to incentivise or penalise any form of behaviour or any customer.

If you did, however, use more at the night rate - it would still be cheaper for you.  How does this then stop incentivising you to use off-peak?  Surely if the difference between peak and off-peak is more, it's even more of an encouragement?
• Forumite Posts: 899
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The recent E7 change is forcing me off E7 (because it's now too expensive for my usage profile) to single rate. That means I will now set my UFH to be at 20c for 07:45 now rather than when E7 finishes at 06:30, increasing load on the grid during the breakfast peak. Similarly I'll now run the washing machine / dishwasher when convenient for me rather than just one load over night. These changes are going to increase demand during the daytime peaks! Where's the logic in that?
• Forumite Posts: 328
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It just seems bizarre that different companies are doing their E7 calculations so differently. Some are increasing the difference between night time and day time pricing massively (which would have suited me) others like Octopus seem to be putting both rates up (while saying it's not their fault). Do the different companies really have such different "average users in average areas" or are the rules just so unclear (or not there at all) so they're all just making up some random numbers?
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• Posts: 0
Newbie
It just seems bizarre that different companies are doing their E7 calculations so differently. Some are increasing the difference between night time and day time pricing massively (which would have suited me) others like Octopus seem to be putting both rates up (while saying it's not their fault). Do the different companies really have such different "average users in average areas" or are the rules just so unclear (or not there at all) so they're all just making up some random numbers?
E7 has always had a completely free choice of balance between day and night rates, as long as the weighted average (58% day & 42% night) was below the OFGEM E7 cap level @ 4200kWh.  There has never been a limit, target, or method by which companies were supposed to decide what day and night rates individually should be.  Day 60p/kWh & Night 33.93p/kWh, Day 65p/kWh & Night 27.02p/kWh, or Day 70p/kWh, Night 20.12p/kWh would all have been equally acceptable on the original OFGEM October cap.

The confusion comes with the EPG.  For single rates, this was just a new cap number (in £), i.e, the £2500 average across regions.  For E7 tariffs though, the EPG didn't do this.  It picked a p/kWh discount to apply to whatever E7 tariff the supplier decided - just like happened to single rate fixed tariffs - which was supposed to be a comparable amount of support.  There was also some sort of calculation that put a floor on the rate (or a cap on the discount) but this has never been clear to me in the E7 world.

The OFGEM caps (both single and E7) go up in January, so there has been a new discount calculated based on the new single rate support level to apply to a new set of E7 tariffs.
• Forumite Posts: 333
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edited 17 December 2022 at 2:10PM
I am baffled by the E7 changes. Yesterday I received this PDF email attachment from Octopus:-

=================================================================================

When I emailed them to ask if I could save money by switching to a non E7 tariff, I received this:-

That doesn't help much because the Flexible Octopus prices quoted do not include the Jan 2023 increase.
It's doubly confusing because the figures do not include the gov support discount.

I can't work out whether I would be better off keeping my existing ex Avro E7 tariff or switching to the Flexible Octopus non-E7 tariff.
As you can see from the Annual Consumption figures above, I use very little nighttime electricity. As a pensioner, I tend to get up late and go to bed early in winter in an attempt to save money and keep warm.

• Posts: 0
Newbie
That little night rate usage would usually indicate that a single rate tariff is better.

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