January 2024 Price Cap announcement

  • Anasa_EONNext's Avatar
    Community Manager
    What is the Energy Price cap?

    The energy regulator Ofgem has just announced that the price cap will rise to £1,928 for Direct Debit dual-fuel customers on a standard variable tariff from 1 January 2024.

    A little more about the Price cap...


    Simply put, the price cap is the maximum price per unit that your energy supplier can charge you for your energy. It also includes the maximum they can bill you for your standing charge too. The price cap figure is an average, you will pay more or less depending on your energy consumption. The specific unit rates each customer sees will vary by region and payment type. The government introduced the price cap in 2019. It is set by the energy regulator Ofgem and reviewed four times a year.

    What is changing in the January 2024 price cap?...


    Ofgem has announced the price cap is changing on 1 January 2024. Unit rates will increase for all customers. Standing charges also vary depending on the method of payment and the region you live in, but will change for all customers. Ofgem has changed their definition of ‘average energy use’. Ofgem’s old definition of average energy use, known as the Typical Domestic Consumption Values (TDCV) has changed to more closely reflect the current average energy use. Learn more about Ofgem’s average electricity and gas usage and how they will use it in the future.

    How will the January 2024 price cap affect your bills?


    Between October 2022 and June 2023 the price cap did not determine your domestic bills. The government brought in the Energy Price Guarantee (EPG) to protect customers from rising bills. The EPG was set at £2,500 until 30 June 2023. With Ofgem’s July price cap dropping below the £2,500 EPG level the government support is no longer in effect. Meaning that customers' prices are once again determined by Ofgem’s price cap. The government raised the threshold of the EPG to £3,000 from 1 July 2023. With January’s price cap set to remain below the EPG it will still be the price cap that continues to determine your energy prices. The Energy Price Guarantee is a discount on consumer energy prices that aims to keep the average household bill below £3,000 a year (£2,500 between October 2022 and June 2023) to reduce the impact of recent rises in wholesale energy costs.

    How is the price cap calculated?..


    The price cap is calculated on a few things that make up the cost of supplying your energy. Such as operating and net work costs and costs for maintaining, running and upgrading the gas pipes and electricity cables .

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    We're here to help...


    We're here to support you in any way we can and have some helpful resources where you can get support access support from us, charities and the government.

    We've also recently launched TellJo where we can help find the best support for you and your circumstances tailored to your specific needs. You can find out more from our recent post all about TellJo

    You can find out more about the support we offer on our A helping hand - Extra support with the cost of living thread. There's also lots of other energy saving advice & helpful information on the E.ON Next blog.

    UPDATE:

    You can find the latest up price cap announcement (1 April 2024 - 30 June 2024) by following this link 👉 Ofgem energy price cap April 2024 - Everything you need to know!
    Last edited by DebF_EONNext; 23-02-24 at 11:16. Reason: UPDATE
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  • 4 Replies

  • MJD's Avatar
    Level 1
    @Anasa_EONNext Why does EON automatically bang up tariffs to the maximum permitted by the regulator? Is it because they cannot bean-count for themselves or because they want to maximise profits at the expense of their customers!
  • meldrewreborn's Avatar
    Level 91
    @MJD

    Energy companies maintain that their profit margins are too thin to undercut the price cap by much, although some trim at the margins. Competition is slowly returning, but any really good deal would lead to them being swamped.
    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.
  • Louh's Avatar
    Level 1
    I found this really interesting price cap calculator here that calculates your costs with the price cap. https://www.aquaswitch.co.uk/blog/energy-price-cap/
  • meldrewreborn's Avatar
    Level 91
    @Louh

    As far as I can see it doesn’t calculate anything at all - it just gives you unit prices and standing charge. Volunteers here have posted the prices some while ago. If people have an online account they can get their tariff prices there.

    As this was your first post would it be uncharitable if I suggested your aim was to promote that site rather than help our forum members?
    Last edited by meldrewreborn; 10-01-24 at 14:00.