Ofgem announces new price cap, effective October 1st

bristolleedsfan

alinwales said:

I used to love no SC tariffs back in the day (up to around 2010 from memory). They recouped the SC amount through higher unit charge for the first n units, then standard rate after that. It meant if you used fewer than n units you'd be better off, but if you used more than n units you'd be no worse off than those on standard rates with SC. I did the maths. Resulted in a £5 gas bill over the summer months.

there should be means for those that *need* to use more energy to get some kind of rebate, however there's not going to be a solution that makes everyone happy. 

Taken from 4th post on this thread

"We are asking energy suppliers to offer energy tariffs that have no or low standing charges as well as their current tariffs. This will mean that energy efficient households will be able to choose a tariff that rewards them for using less energy. It will also mean that other energy customers can also choose from more tariffs that meet their needs"

spot1034

fiddlesticks0 said:

BarelySentientAI said:

fiddlesticks0 said:

MattMattMattUK said:

fiddlesticks0 said:

Does anyone know how long, typically, after a price cap increase announcement do favourable fixed deals get pulled and new fixes with increased prices replace them? I'm guessing fairly soon but as the change isn't until October I'm not sure, also as this amount of increase in the cap has been projected for a while and these fixes with prices below the amount of the Oct increase have been available.
I looked to getting a fix earlier this week for the first date I can switch without paying exit fees as I thought the standard window for choosing a switch date was 28 days ahead, but the provider in question only offer a date up to two weeks in advance, so I'd be stuck for another week before I could take out that deal, if it doesn't disappear before then.

It happened about a month ago. There is a good idea of where the cap will be for quite a while before it is published, if you wanted a cheaper deal over winter you needed to have fixed in June or July.

There are current fixes are below the 10% Oct increase however - I just want to know how long they usually stick around after the announcement - the exit fees for me are too high to leave within 49 days of my current contract end date, so June/July were not an option as I have low energy useage, so they are higher than the savings I'd make by leaving the contract early.

Changes based on Oct have happened.

Changes based on Jan predictions will still happen for 8-10 weeks.

Fixes are priced based on the whole period, not the first day.

Fair enough - current deals are still relatively cheap for me as I fixed this time last year before the numerous price cap falls in the past year, so I just wanted to check how long the these current fixed deals are likely to stick around for.

Last week wholesale prices levelled off and in fact they have come down a little in the past few days, so at the moment fixes aren't likely to keep going up in the way they did in the first half of this month - indeed you might even see some replaced by new ones which are a fraction cheaper.

Watch the wholesale market to see where it goes next, and that will be the best clue as to how fixes might start to change. Factors which will influence it will include the situation in the Middle East, Russia/Ukraine, any other international conflict which flares up, anything that disrupts gas supplies including sabotage, accidents and industrial action, and then there is the complete unknown of how cold a winter we are going to have.

If all those factors play out in such a way that the wholesale price of gas will decline from here, it might make sense to wait for some cheaper fixes to come along. Given the way things are at the moment, I'm not sure I'd like to bet on it though!

Marvel1

Why is London so cheap for standing charge compared to the rest? Thought everything in London is more expensive.  

MattMattMattUK

Marvel1 said:

Why is London so cheap for standing charge compared to the rest? Thought everything in London is more expensive.  

Population density, more people are fed off the same km of mains cable, more people can be fed from a substation, the more rural it gets the more expensive the infrastructure becomes per dwelling, some places in the Lakes or Scotland might need many km of cables to reach their property and possibly even their own substation, or one only serving a few homes. 

Electricity is generally more expensive as London is further away from sources of generation so transmission losses are higher. 

MattMattMattUK

fiddlesticks0 said:

MattMattMattUK said:

fiddlesticks0 said:

Does anyone know how long, typically, after a price cap increase announcement do favourable fixed deals get pulled and new fixes with increased prices replace them? I'm guessing fairly soon but as the change isn't until October I'm not sure, also as this amount of increase in the cap has been projected for a while and these fixes with prices below the amount of the Oct increase have been available.
I looked to getting a fix earlier this week for the first date I can switch without paying exit fees as I thought the standard window for choosing a switch date was 28 days ahead, but the provider in question only offer a date up to two weeks in advance, so I'd be stuck for another week before I could take out that deal, if it doesn't disappear before then.

It happened about a month ago. There is a good idea of where the cap will be for quite a while before it is published, if you wanted a cheaper deal over winter you needed to have fixed in June or July.

There are current fixes are below the 10% Oct increase however - I just want to know how long they usually stick around after the announcement - the exit fees for me are too high to leave within 49 days of my current contract end date, so June/July were not an option as I have low energy useage, so they are higher than the savings I'd make by leaving the contract early.

There are fixes slightly below the increased rate, but they are also above the current cost and above the predicted costs for Q2 next year, they are around 2-3p per kWh more expensive than the fix that was available a few months ago. The point is that they are locking you in for 12 months, not just the next quarter. 

Scot_39

armistice said:

wrf12345 said:

see they have sneaked in yet another s/c increase for electric, albeit slightly less than a penny a day... luckily locked into Agile until March so does not affect me yet... the govn needs to act on this and abolish the s/c in favour of an increased unit rate but preferably with a fixed, much lower rate, tor the first 2kw usage and then let competition sort the higher unit rate out.

They have also today published an 'options paper' following the consultation on standing charges.
Standing charges: domestic retail options (ofgem.gov.uk)

If you feel strongly about standing charges you should read it and provide feedback -> Standing charges: domestic retail options - Ofgem - Citizen Space

The options in the paper could reduce the standing charge by between £20 and £100 per year by transferring parts of these fixed supplier costs to the unit rate (the price paid for every unit of energy used). 

Thanks for the options link.

But when people read it they need to remember it is written by Ofgem and appears to be based on their default tariff level tables and so consumptions for balance points.  There industry internal table numbers and not the median tdcv typical consumers may think of - so 3100, 12000 and 4200. Not those used as the basis for headline £1717 duel fuel cap just announced - 2700, 11500- and 3900 for when anyone also quotes multirate consumer version.

And for folk like me (and the other c4.4m homes on all electric) - the £20-£100 shift only applies to duel fuel - not electric only.

And it's a simple shift at their consumption level 

E.g. take table a6  dd sc policy revised to shift £100 : 

10.52×365/1.24 = 3097 units to balance costs.  3100 with rounding, not 2700.

And for those off gas grid - on electric only - it is important to realise they apply roughly the same mechanism for price change to electric only as they do to single rate electric and gas combined when talking about the total shift of the £20-100 from SC to unit rates in tables A2-A6 - its a duel fuel total shift.

So again  take the £100 max shift case in Table A6 again - rather than offering multirate all electric that £100 shift - multirate as tabled only sees 10.55p a day on DD SC = £38.51 per year. 

But of course if they did at a true £100 shift - from a multirate consumers point of view - offering more would shift more onto unit rates - penalising those who use more than the TDCV even more.  Making the 2 all electric examples as per their Table A7 even worse.

And as presented - £116 might sound politically fair to someone like Miliband (as Energy secretary making the ultimate call I guess) -  for a 3x median tdcv user to pay for others potential saving some of a headline £100 shift.
But arguably it looks a lot less fair if others - low users - on all electric only saving part of £38 under the SC shift.

If 4.4m - number of homes off gas grid in 2021 - c15% -  are only saving under 40% of headline savings on SC surely tables A2- A6 should include the £/pa and last column A7 reflecting their true shift.  Ideally separated out as table a8.

And  remember there's  a seperate Ofgem default tariff level table set for multirate electric meters - so it's not unreasonable for it to be treated separately, properly and above all clearly throughout such an analysis. 

Basically if the call is also for additional consumer feedback - tables a7 and possibly a2-a6 in my opinion need redoing for all electric at least.

And lets face it those reliant on all electric inc all their heating needs  (no coal, wood, calor or oil boilers etc) - arguably face the highest Ofgem controlled energy costs of all for a given energy need. Surely the document should surely be more explicit in pointing out benefits and costs for such a distinct and inherently financially disadvantaged group from any policy changes.

As I don't trust politicians like Miliband who may be having the final say to do the same analysis.  As I can just see naive  headlines claims boasting about cutting the SC by £60 if he goes for the Ofgem medium table a4, when in reality for c4.4m / 15% of consumers doing much less.

And for the c85% on mains gas - not that the split might matter to some - but why are the shifts biased disproportionately to gas SC in the duel fuel analysis - £38.40 and £62.74 if take Table A6 DD p/day x365.

Kind of perverse since the average standing charges are the other way around - c£220 and c£115 iirc.

And strange when part of problem now is past increases in network costs  and going forward even higher ones they forecast  -  growing electricity network costs that is (one assumes driven by renewables connections) in the electric SC.

Is this perhaps to placate those who use little or no gas in summer - who think they should pay zero on such days ?

Well those on all electric use a lot less energy in summer too - perhaps we should also get a seasonally discounted standing charge.

fiddlesticks0

MattMattMattUK said:

fiddlesticks0 said:

MattMattMattUK said:

fiddlesticks0 said:

Does anyone know how long, typically, after a price cap increase announcement do favourable fixed deals get pulled and new fixes with increased prices replace them? I'm guessing fairly soon but as the change isn't until October I'm not sure, also as this amount of increase in the cap has been projected for a while and these fixes with prices below the amount of the Oct increase have been available.
I looked to getting a fix earlier this week for the first date I can switch without paying exit fees as I thought the standard window for choosing a switch date was 28 days ahead, but the provider in question only offer a date up to two weeks in advance, so I'd be stuck for another week before I could take out that deal, if it doesn't disappear before then.

It happened about a month ago. There is a good idea of where the cap will be for quite a while before it is published, if you wanted a cheaper deal over winter you needed to have fixed in June or July.

There are current fixes are below the 10% Oct increase however - I just want to know how long they usually stick around after the announcement - the exit fees for me are too high to leave within 49 days of my current contract end date, so June/July were not an option as I have low energy useage, so they are higher than the savings I'd make by leaving the contract early.

There are fixes slightly below the increased rate, but they are also above the current cost and above the predicted costs for Q2 next year, they are around 2-3p per kWh more expensive than the fix that was available a few months ago. The point is that they are locking you in for 12 months, not just the next quarter. 

I'm not sure where you're getting these figures from - M.Lewis' video update this morning confirmed the cheapest fixes right now are 7% less than the increase coming in Oct, so 10% below the projected Jan cap.

MSE_James

Here's Martin's video: 

 https://www.youtube.com/watch?v=3VywmbfVYdk 

and the related MSE article: 

https://www.moneysavingexpert.com/news/2024/08/martin-lewis-new-energy-price-cap-announced-for-october/

username

I would rather they just quote the actual standing charges and per kWh figures rather than some arbitrary TDCV figure and associated costing.
It does not encourage people to think based upon their own and actual usage or consider the impact based upon their own circumstances.

Sea_Shell

username said:

I would rather they just quote the actual standing charges and per kWh figures rather than some arbitrary TDCV figure and associated costing.
It does not encourage people to think based upon their own and actual usage or consider the impact based upon their own circumstances.

It isn't just one set of figures.   there is no THE.  

Have you seen the OFGEM tables with the various regional caps and different bands depending on payment method or dual-rate tariff???

The general public would struggle to get the head around anything more than an "average" headline figure.  

This information is all out there if people can be bothered to do their own research.   But first hurdle is getting them to understand, even after all the articles that have been published on energy over the last few years.

Some people still don't understand the basics.