PSA: Some Energy Providers are changing Economy 7 rates significantly again on 1st April 2023

Nath4n

Hi all,

Many of you I'm sure are already well clued up on this, and I have seen this information spread across several threads but if useful - a very simple summary is that, although the Energy Price Guarantee is being maintained at the current level of £2500 cap on 'average' spend (which is actually just a reduction in kwh usage rates charged) for another 3 months - some Economy 7 rates are once again going haywire on 1st April 2023. As I understand it, this is for 2 main reasons:

- The Energy Price Cap calculations set by OFGEM every 3 months are incredibly complex with a huge amount of variables, particularly on location and payment type that particularly affect E7 calculations.

- In addition to this, energy providers set their own 'balance' for Economy 7 rates between peak / off-peak / service charge in order to achieve what they determine as 'average usage', and many have decided to 're-evaluate' this balance (Looking at you Utility Warehouse..).

Due to this, you'll need to manually calculate which provider is best for your region and individual usage 'split' (i.e. peak / off-peak %'s).

I have created a simple manual spreadsheet for (some) of the LONDON (Direct Debit) rates, and you can see this here (switch sheet tabs at the bottom to flick between 1st Jan and 1st April rates): (Removed by Forum Team) 

Or via screenshots here: https://imgur.com/a/c5SJYr3.

I know there are more advanced alternatives out there, but feel free to download this and punch your own rates in. (+If you spot any errors let me know!).

I have put some example kw/h usage figures in, but the 25/75 split is not too dissimilar to what some people like myself achieve, with immersion / thermal coil boilers, and night storage heaters etc.

As an example, I switched to Utility Warehouse in early Jan after discovering I would make substantial savings with them over OVO. You can see this in the 1st Jan calculations, for this estimated usage, OVO would charge £1,771.20 p/y whereas UW would charge £1,360.46! So I made the switch.

Now, however, are you can see on the 1st April calculations (confirmed formally in an email sent to me yesterday), Utility Warehouse are flipping their balance quite significantly on 1st April resulting in fairly substantial price hikes for high off-peak users.

Some providers are staying broadly similar for this example usage, such as EDF and British Gas.

I'll leave the debate on whether less than 1 week notice of a substantial re-calculation of their E7 'balance' by UW is in line with OFGEM guidance on price increase notifications, but it's safe to say after doing these calculations I'll be promptly switching away - and ideally taking advantage of a referral offer in the process.

TLDR tips:

- Individually compare 1st April E7 unit rates / standing charge for your region (the screenshots above are for LONDON DIRECT DEBIT ONLY) as they are ALL changing on 1st April, and the scale of this change can differ substantially. Unfortunately there is no regularly updated central resource for this, and the price comparison websites often have incorrect or outdated rates, so you'll need to do this manually using providers websites. Some (like Octopus) are very transparent and publish their full tariff rates online (https://octopus.energy/blog/energy-price-cap-apr-2023/), others you'll need to do manual 'quotes' on their websites and then delve into the E7 variable tariff details once they provide your quote. It's possible some may not have published their new E7 unit rates quite yet, but will after 1st April. Another good resource if you can be bothered to scroll/filter are responses to Martin's tweet here: https://twitter.com/MartinSLewis/status/1638158823612399616. I used this to find some of the new London 1st April 23 rates before they were published. Some of these changes do seem disproportional, so I expect to see an MSE article on this soon, similar to the E7 media coverage in early Jan.

- Calculate both your individual day / night (peak / off-peak) usage and % split. You can do this by looking at 12 months worth of meter readings to get a broad estimate.

- Use both of the above to put together your own comparison and figure out which provider is the cheapest for your individual split, or indeed if you may be better off switching to a single rate tariff altogether (usually this is the case if your 'day' usage makes up 60%+ of your total usage).

Good luck!

Swipe

Can import the spreadsheet to google sheets and post a link please? Is that still allowed?

Nath4n

Swipe said:

Can import the spreadsheet to google sheets and post a link please? Is that still allowed?

That's exactly what I did, but unfortunately the admins have said that this isn't allowed and have removed the link.

MSE_James

Hello - I'm afraid Google Sheets links are not permitted here for privacy reasons, as you can see the avatars and usernames of other signed-in Google Account users viewing the document at the same time as you. 

pochase

There is one big problem with the way you are looking at it, you are using the annual usage figures, but you need to look at just the usage for the next 3 months.

If you would look at staying with one supplier for the next year(s) you would be correct, but you are making a decision only for the next 3 month.

In each quarter a different supplier might be cheaper, even more so as the E7 tariffs seem to change now every three month. What is nowthe cheapest for the next year is not necessary cheapest for the next three month, and in three month time the new rates might change again.

SO if you want to play this game you need to know your day/night usage for each three month periof.

Nath4n

pochase said:

There is one big problem with the way you are looking at it, you are using the annual usage figures, but you need to look at just the usage for the next 3 months.

If you would look at staying with one supplier for the next year(s) you would be correct, but you are making a decision only for the next 3 month.

In each quarter a different supplier might be cheaper, even more so as the E7 tariffs seem to change now every three month. What is nowthe cheapest for the next year is not necessary cheapest for the next three month, and in three month time the new rates might change again.

SO if you want to play this game you need to know your day/night usage for each three month periof.

Yes that's a very good point, likely stemming from the fact that I didn't fully understand in January that this would happen every 3 months! But you're absolutely right - that should be factored in if you really want to maximise further. Personally for myself, my peak/off-peak split remains pretty consistent across the year - so generally the cheapest off-peak rate is the best provider to go for, but other users will certainly have more nuanced usage across different periods of the year.