Price cap falls - but pay more !

EssexHebridean

Readyto said:

looks like the cap is increasing from 2500 to 3000, so I guess rates should increase by ~20%

Gas - current rate 10.3p  - after 1st April 12.36p
Electricity- current rate 34p  - after 1st April 40.8p

Nope- the EPG is increasing as you've stated - the cap is what has been announced today. In real terms right now the cap means very little to the consumer though, as it is the unit rates decided by the EPG that define what we pay when we are billed. 

And of course it should be added that the electricity rates being talked about are single rate only - those of us on E7 and similar tariffs will be seeing altogether different prices. 

Scot_39

MikeyPGT said:

Scot_39 said:

The 7p rise in the average electric SC is a little disappointing.

I can think of other words!  

Forum rules stopped my posting something stronger.

ProDave

This is indeed the most confusing anouncement I have seen for a long time.

I read it as the price cap is reducing by £1000 per year, which surely means the capped pence per kWh prices must therefore also fall.

But then because there is no longer the £400 and £200 energy grants direct to customers the price paid by the consumer will rise.

At least that is now one news reporter reported it, but if so their maths is not very good.

Does anyone yet have an idea that the new capped prices per kWh for gas and electricity might be?

Spoonie_Turtle

ProDave said:

This is indeed the most confusing anouncement I have seen for a long time.

I read it as the price cap is reducing by £1000 per year, which surely means the capped pence per kWh prices must therefore also fall.

But then because there is no longer the £400 and £200 energy grants direct to customers the price paid by the consumer will rise.

At least that is now one news reporter reported it, but of so their maths is not very good.

Does anyone yet have an idea that the new capped prices per kWh for gas and electricity might be?

That's probably going to be true but what is definitely true and the most immediate reason people will pay more per unit is the government discount of the unit rate is reducing.  That's the EPG, colloquially referred to as a 'cap' as well but it is not the Ofgem price cap.

We don't know the forthcoming unit rates, at the moment they are just estimates and vary.  (I can't remember any of the estimates though.)

Qyburn

Scot_39 said:

Qyburn said:

Could anyone post the best link to the actual published information?  Thanks,

Or if you want the full regional / payment method tables - see links off of

https://www.ofgem.gov.uk/publications/default-tariff-cap-level-1-april-2023-30-june-2023 

Do you know if those include VAT? Looking at N Scotland it looks like S/C of 56p, and unit rate of 47.6p/kWh. Roughly, and assuming the figure for 3100kWh includes S/C.

Mstty

km1500 said:

OK thank you both. So there are two price caps. The price cap, and a second price cap called an EPG price cap. Told you it was complicated!

It really is not complicated at all.

However the media storm around today price cap announcement and the following media and social news will be sensationalist to say the least whipping people up and we will see some of them here and will try and explain it.

ProDave

Mstty said:

km1500 said:

OK thank you both. So there are two price caps. The price cap, and a second price cap called an EPG price cap. Told you it was complicated!

It really is not complicated at all.

However the media storm around today price cap announcement and the following media and social news will be sensationalist to say the least whipping people up and we will see some of them here and will try and explain it.

I am not trying to be sensationalist but genuinely trying to understand it, as are probably 99% of consumers.

As far as the consumer is concerned, there is just one price cap, the limit on how much a domestic customer can be charger per kWh and a limit on the daily standing charge.  But to obscure the issue they chose to describe the "cap" not in terms of price per kWh but in terms of the average annual energy bill.

So today we are told the "cap" is being reduced and the average energy bill will drop.  But the customer will pay more.

And people wonder why there is confusion.  Whatever happened to the ministry of plain talking?

Do the people that write these press releases about the cap reducing but bills rising deliberately set out to confuse?

EssexHebridean

ProDave said:

Mstty said:

km1500 said:

OK thank you both. So there are two price caps. The price cap, and a second price cap called an EPG price cap. Told you it was complicated!

It really is not complicated at all.

However the media storm around today price cap announcement and the following media and social news will be sensationalist to say the least whipping people up and we will see some of them here and will try and explain it.

I am not trying to be sensationalist but genuinely trying to understand it, as are probably 99% of consumers.

As far as the consumer is concerned, there is just one price cap, the limit on how much a domestic customer can be charger per kWh and a limit on the daily standing charge.  But to obscure the issue they chose to describe the "cap" not in terms of price per kWh but in terms of the average annual energy bill.

So today we are told the "cap" is being reduced and the average energy bill will drop.  But the customer will pay more.

And people wonder why there is confusion.  Whatever happened to the ministry of plain talking?

Do the people that write these press releases about the cap reducing but bills rising deliberately set out to confuse?

No, but the truth tends not to sell many papers or generate many clicks! 

“While wholesale prices are falling, due to the reduction in government support most consumers will see an approximate 20% increase in their unit rate on both gas and electric as well as an increase in the electricity standing charge. A typical household will still be paying approximately £280 less under the Energy Price Guarantee than they would if rates were set at the Ofgem price cap, however”. 

There you go - I think it pretty much summarises, but it’s not going to get your average Daily Fail reader frothing st the mouth is it! 

Scot_39

ProDave said:

Mstty said:

km1500 said:

OK thank you both. So there are two price caps. The price cap, and a second price cap called an EPG price cap. Told you it was complicated!

It really is not complicated at all.

However the media storm around today price cap announcement and the following media and social news will be sensationalist to say the least whipping people up and we will see some of them here and will try and explain it.

I am not trying to be sensationalist but genuinely trying to understand it, as are probably 99% of consumers.

As far as the consumer is concerned, there is just one price cap, the limit on how much a domestic customer can be charger per kWh and a limit on the daily standing charge.  But to obscure the issue they chose to describe the "cap" not in terms of price per kWh but in terms of the average annual energy bill.

So today we are told the "cap" is being reduced and the average energy bill will drop.  But the customer will pay more.

And people wonder why there is confusion.  Whatever happened to the ministry of plain talking?

Do the people that write these press releases about the cap reducing but bills rising deliberately set out to confuse?

Agreed - but even the formal press notice from Ofgem today - still makes the point that ultimately right now the EPG is likely to be determining "normal" domestic costs.

Some companies quote their rates and the EPG as a rate discount - on bills.

So they will see the new lower Ofgem rates - but also an even higher reduction in the current EPG discount (31.8p electric 6.xp gas etc)  - as the effective cap - the EPG for now - rises from nominal £2500 - £3000.

The net change likely to 20% higher - but as to exact split gas / electric ?

Thee 7p increase in electric SC and 1p on gas SC = extra £2.48 for a 31 day month - but arguably this will factor into EPG discount at nominal energy use.

double_dutchy

It doesn't help that on the BBC 6 o'clock news tonight, within about 2 minutes, they told us firstly that the "average household" was paying "just over £2,000" (presumably £2,500 EPG minus £400 EBSS).....and then the average household was also paying "£2,500" (presumably not including the £400 EBSS this time).

They are not even consistent within the same news bulletin!