Energy Price Guarantee: How this works and what this looks like

  • PeterT_EONNext's Avatar
    Community Team
    Update as of 17th November 2022:

    Today the Chancellor has made his Autumn budget statement.
    In April 2023, the Energy Price Guarantee will increase for the average household from £2500 up to £3000 per year.

    In March 2023, we will also see the Energy Bill Support Scheme (£67 rebate) come to an end, meaning the cost of energy bills will increase.


    We understand that this is not the news anyone has hoped for and will likely cause a number of customers, and yourselves, to worry about how they will afford the increase.

    There is help and support with your energy bills out there and we are here to support you too.

    For more information please visit the 'New government energy bill scheme announcement' over on the blog.


    Hi Everyone!

    Update 27 Oct 2022: This is an update to let those of you know, who are currently on Fixed tariffs, what will be happening with your prices.

    Fixed tariff that is currently set below the EPG rate for your area: If you're currently on a fixed tariff (this will be few of you) that is set below what the EPG rates are as of 1st Oct, you'll remain on this tariff for the duration of the tariff term, then roll onto the standard variable tariff once this comes to an end.

    Fixed tariff which is priced above the EPG rates for your area: If you're on a fixed tariff which is priced higher than the EPG rates, the adjustment to unit rates across these tariffs means that we've been unable to alter them down low enough so that you're only paying the capped rates laid out for 1st Oct 2022 - 30th March 2023. Due to this,
    everyone on these tariffs will now be moved to the Standard Variable Tariff, the Next Flex, so that you'll benefit from the EPG unit rates until 30th March 2023. If this hasn't happened for you yet, you should receive information about this shortly via an email or letter, and any charges will be backdated to 1st October so that you don't miss out.

    If you're moved off of your fixed tariff to the Next Flex tariff,
    you won't pay higher than your original fixed priced contract regardless of what happens in April.

    This means if we've had to move you to the Next Flex tariff so that you're paying the government EPG rates and your fixed tariff was due to run, as an example, until 17th June 2023, then you won't pay anything higher than what was agreed on the fixed tariff you had taken out, which we had to move you from, until after 17th June 2023 (please bear in mind, the dates here are an example)

    Once we have clarity from the government on what will happen to energy prices from 1st April onwards, we'll be in touch with all of our customers to let you know what will happen next.



    Update 19 Oct 2022: On a fixed tariff and your EPG rates don't look quite right? We're updating you on this whilst this is being updated, over on this thread
    here.


    Update 17 Oct 2022: The new Chancellor, Jeremy Hunt, has made changes to the Energy Price Guarantee (EPG) scheme. The EPG will now run until April 2023. This is a change to the government's plan which had originally announced that the scheme would run for two years. The Chancellor said that there would be a Treasury-led review into how households and businesses are helped with energy bills from April next year. He said support being provided from now until April will not change but beyond that date there will have to be changes. As soon as we have more information on how this will impact our customers we'll let you know.

    I know it's been a couple of weeks now that we've been speaking about the Energy Price Guarantee and I wanted to get this post out to provide some more in depth information about what's happening currently and how this will look on your bills, as I know that this hasn't been a very clear roll out for these changes.

    (feel free to add your own questions below this post, and we'll be sure to get you an answer, as well as keep this thread up to date should anything change)

    What is happening with tariffs?

    The decision has been made to move those that are on a fixed tariff to the Next Flex (which was our variable priced tariff, I'll expand on why this isn't so 'variable' anymore shortly) where staying on the fixed tariff may have meant you would be paying more standing charge on either the gas or electricity, so that you're not at a financial detriment.

    Some of you may be on a fixed tariff where the standing charge is lower than those that are on the variable tariff as of 1st October. So that you can benefit from this slightly lower standing charge, you'll remain on the fixed tariff for the duration of your original contract, and your unit rates will be adjusted down to be in-line with the Energy Price Guarantee.

    Going back to why I referred to our Next Flex tariff as no longer technically being 'variable' is due to the government's intervention with the EPG. The EPG will 'fix' the cost for all gas and electricity customers, across all suppliers, at the same rate (depending on area) until 30th September 2024. We're unsure if this will change should prices fall during this period and would need to wait until we hear this from the government, if this were to happen.

    EDIT: I know a few have been asking why some electricity tariffs are showing as higher than the EPG rate of around 34p/kWh, possibly around the 42/43p/kWh mark on electricity for some. The reason for this is because you have an Economy 7 meter, and therefore have a day and a night rate. The government announced rate of around 34p/kWh is based on those who pay by Direct Debit, on a single rate tariff.

    How will this look on my bills going forward?


    The bills are a little tricky, and I'll explain how this will work below in the hope that this can provide you with some clarification.

    On your bill, you'll see a top line called "Energy Used" and will show how many Kilowatt hours have been used and at what cost - this cost will be at the original £3.5k Ofgem price cap firstly.

    We must bill you to this price first and then display the reduction on your bill, based on the Energy Price Guarantee.

    Please also note, the rates you see on your online account include VAT at 5%, the rates you see on the bill don't as VAT is added at the end.

    Underneath, there will be another line called "Energy Price Guarantee" and that will show the same Kilowatt hours and will show the reduction for the Energy Price Guarantee.

    Why does it look like this?

    On your bill, we're showing you what the original price is, and then showing you the saving after the EPG has been applied.

    Below is an example of how this will look on your bills whilst the Energy Price Guarantee is in place:


    Name:  EPG Example.png
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    If you have any questions still around the above, please post below and we'll see if we can clarify further for you.

    We'll work to update this thread should anything change so that you have the most up to date information.

    Pete 😊
    Last edited by Beki; 22-11-22 at 12:58.
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  • 49 Replies

  • AndyGee's Avatar
    Level 1
    @PeterT_EONNext

    Hi,

    We are currently on the Next Flex tariff, with an electricity rate of 44.39 p/kWh and a gas rate of 10.43 p/kWh.

    The information from the Government https://www.gov.uk/government/public...september-2022 states:
    "The average unit price for dual fuel customers paying by direct debit will be limited to 34.0p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from 1 October."

    When will we see these rates reflected in our accounts and bills?

    Thank you.
  • meldrewreborn's Avatar
    Level 91
    @AndyGee

    The average is just that - its not your rate as the unit prices and the electricity standing charge are all regional, while the gas standing charge is national - don't ask me to explain- its too complicated and historical.. While the variation on gas is acceptable (are you in south Wales?) the electricity rate is too high unless you have economy 7 or similar which i don't think would be the case.

    Give it time like a couple of weeks - everything will be resolved by then for the vast majority of customers.
    Current Eon Next customer, ex EDF, Zog and Symbio. Don't think dual fuel saves money and don't like smart meters. Chronologically Gifted. If I offend let me know by private message, but I’ll continue to express my opinions nonetheless.
  • Sainsbury's Avatar
    Level 1
    @PeterT_EONNext
    "Some of you may be on a fixed tariff where the standing charge is lower than those that are on the variable tariff as of 1st October. So that you can benefit from this slightly lower standing charge, you'll remain on the fixed tariff for the duration of your original contract, and your unit rates will be adjusted down to be in-line with the Energy Price Guarantee."

    Unfortunately this doesn't help those that decided to switch to the SVT. I was on a Sainsbury Smooth Renew 20 tariff at a high rate and having received no communication through the entire process decided to switch.
  • PeterT_EONNext's Avatar
    Community Team
    Hi @AndyGee

    Your EPG rates are already applied. It's because you're on an Economy 7 tariff, so your day rate is higher, and you'll have a lower night rate.

    The communications relating to the average of around 34p for an individual paying by Direct Debit (an average as it does vary by region) is based on a Direct Debit paying individual, who has a single rate meter.

    Pete 😊
  • PeterT_EONNext's Avatar
    Community Team
    Hey @Sainsbury

    I'm sorry to hear that you may have come off of your fixed tariff earlier to move onto the SVT.

    I appreciate that some may have done this, whereas others haven't and have waited. Although I can't speak for Sainsbury's Energy directly, communications around the EPG rates were published as soon as they could be, as these weren't immediately available after the announcement by the government and this change has come with a significantly smaller window (we'd usually have 8 weeks or more notice about price changes from Ofgem) meaning it has been more difficult to advised on this over the past few weeks.

    When in a fixed contract, you have the right to change your tariff at any time, with no exit fee (with us here at E.ON Next) without penalty, this choice is yours to make. It's always best to weigh up the options with the information available at the time, on the Sainsbury's Energy website, The government website and Ofgems website.

    - Pete
    Last edited by PeterT_EONNext; 07-10-22 at 19:44. Reason: Spelling
  • Sainsbury's Avatar
    Level 1
    @PeterT_EONNext
    Thanks for your reply! Yes I made my decision with the information I had🙄

    (Well done to the customer service staff at EON for having to deal with the fallout...)👍
  • meldrewreborn's Avatar
    Level 91
    @PeterT_EONNext

    Could you take on board the fact that the EPG reduction currently only impacts unit prices, and not to standing charges. These remain within the limitations set by OFGEM in its 29 August 2022 announcement and nothing has changed since then. Can we assume that standing charges will still be set by OFGEM quarterly and that these changes, up or down, will still affect out tariffs? Of course, lots of things might change in the future but is that the current position and expectation?

    So the current flex tariffs are in fact, a sort of hybrid with fixed unit charges and variable standing charges. Given that electricity standing charges went up significantly in April 2022 because of "supplier of last resort" factors, one might expect much of that to drop out in the April 2023 review.
  • PeterT_EONNext's Avatar
    Community Team
    @meldrewreborn That's right yes!

    It is a little hard to say what is going to happen going forwards with the government intervention of the EPG to bring household energy bills down to a new capped level.

    Ofgem do have on their website though a table still showing 'Price Cap Period - 01/01/2023 to 31/03/2023' with an announcement date set for 24th November 2022. As well as '01/04/2023 to 30/06/2023' with an announcement date for that period being 27th February 2023.

    I couldn't say for sure what is going to happen in relation to standing charges coming down (as you rightly pointed out, these were increased after the fall of 29 smaller suppliers) but with Ofgem stating these announcement dates on their website, it's safe to assume adjustments can (and should) be made to the EPG tariff over the 2 year period, assuming costs fall and any adjustments should then mean the cap being lowered.

    Of course, the above is just speculation, as we really don't have anything solid on this right now I'm afraid.

    Pete 😊
  • AndyGee's Avatar
    Level 1
    @PeterT_EONNext

    Thank you. I did not realise we were on an Economy 7 tariff. We have not long been in this house and I suspect it used to have night storage heaters installed which I suspect explain the Economy 7. We do not use much electricity at night, so can you please suggest how we come of this tariff?

    With thanks.