New Energy Price Cap

itsme83

The new Energy Price Cap comes in on 1st July. What does this mean for me since I am on a Fix that was reduced to the Government Energy Price Guarantee level.

MSE_James

Hello - the implications of the new price cap for those on fixed deals are covered in our article here:

https://www.moneysavingexpert.com/news/2023/05/martin-lewis--the-energy-price-cap-will-fall-in-july--reducing-t/ 

itsme83

thanks. I'll have a look

itsme83

I'm still unclear on what will happen to my bills. My fix was above the Government's EPG and so EDF dropped my rates to match it. If the EPG is now obsolete, will EDF increase my rates beyond the new Cap since the Government subsidy has been discontinued?

Richard019

Yes, unfortunately you will pay the fixed rate even if it is higher than the Ofgem price cap. Remember EPG up from £2,500 to £3,000 from July as well so this is how it works for someone on typical usage:

Ofgem <£3,000 = EPG subsidy is set to zero for everybody and you pay whatever your tariff is

Ofgem >£3,000 = standard variable rate tariffs are subsidised to £3,000. Assuming OFGEM was £3,500, the subsidy would be worth £500

If you were on a fixed tariff equivalent to £3,300 you would only receive £300 worth of subsidy to bring you to the same level as the EPG

If you were on a fixed tariff equivalent to £3,600 you would receive £500 worth of subsidy and have to pay £3,100

brewerdave

I had it confirmed by EDF C/Services last week that my 2 year tariff fix for gas will be "re-imposed" from 1st July AND that they won't waive the £100 leaving fee even if I switch to their SVT. However I'm waiting until July to jump ship just in case they relent - even with the £100 fee,  I'll be better off overall by mid November on current cap predictions.

Staffordian11

I'm in a similar situation, but my exit fee is £150 per fuel

Still intend swapping to an SVT, as I'll likely be far better off than paying high rates until 31 July 2024, and I'd like to swap to a supplier which actually bothers to issue bills. Just got to decide whether to jump to another supplier on 1 July or swap to EDF's SVT on 1 July then move afterwards once I've paid exit fees.

As an aside, I'm on the usual direct debit payment plan and although EDF say I'm in credit, that's only because they haven't billed me for a while. I'm actually in debit based on usage to date. Would this 'debt' give EDF an excuse to block a swap or would they just charge me the outstanding balance?

bristolleedsfan

itsme83 said:

I'm still unclear on what will happen to my bills. My fix was above the Government's EPG and so EDF dropped my rates to match it. If the EPG is now obsolete, will EDF increase my rates beyond the new Cap since the Government subsidy has been discontinued?

Did you get a bill credit when agreeing to the fixed rate, many EDF customers received hefty bill credits that was viewed as a credit against possibly paying exit fees if energy prices decreased.

brewerdave

bristolleedsfan said:

itsme83 said:

I'm still unclear on what will happen to my bills. My fix was above the Government's EPG and so EDF dropped my rates to match it. If the EPG is now obsolete, will EDF increase my rates beyond the new Cap since the Government subsidy has been discontinued?

Did you get a bill credit when agreeing to the fixed rate, many EDF customers received hefty bill credits that was viewed as a credit against possibly paying exit fees if energy prices decreased.

I didn't - tried hard to get the bribe without success - using the code others publicised - was finally told the code was only available to "selected" customers by email and I wasn't on the list.

thetriggerhappypwner

Wait!

I was under the impression that the price cap was going down to £2,074 for a so called "typical use household" (a phrase that Martin hates using)?  Or have I missed something?

CSI_Yorkshire

thetriggerhappypwner said:

Wait!

I was under the impression that the price cap was going down to £2,074 for a so called "typical use household" (a phrase that Martin hates using)?  Or have I missed something?

You have missed something.

Price cap is not the same as EPG.

The price cap at the moment is £3280.  The EPG at the moment discounts this to £2500.

The price cap is going down to £2074.  The EPG would discount this to £3000, but doesn't need to because it's already lower than that.

edit: which is a bit of a kick in the face to the "why are prices only going down a little when wholesale has gone down a lot?" brigade.  Turns out that the prices are going down a huge amount, but the government isn't paying a massive chunk of your bill any more.