Ofgem energy Price Cap pending... Are you ready?

  • PeterT_EONNext's Avatar
    Community Team

    The Price Cap is coming... Do you know what this means for you? 🤔

    If you're currently on the Standard Variable Tariff, your prices will change come 1 April 2024. See below for a bit of an explainer on what the Price Cap is and how it works!



    We'll have more updates around the Price Cap in the coming week, so keep a look out for this so that you know what will happen come 1 April 2024.

    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; 1 Week Ago at 19:25. Reason: remove feature
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  • 41 Replies

  • meldrewreborn's Avatar
    Level 91
    RANT MODE ON

    Its pedantic of me but OFGEM do not set unit prices or a fixed figure for the standing charge.

    They do though set maximum charges for certain levels of consumption These are zero consumption ( so from this can be derived a maximum standing charge rate) and then consumption of electricity (3,100 kWh per annum) and gas (12,000 kWh per annum ) from which can de derived the maximum unit prices. OFGEM also publish more data for E7 and E10 arrangements, and produce different figures for each of the 13 supply regions in the UK - but not Northern Ireland.

    So first of all supplier needs to decide what level to set their standing charge rate at. They are effectively told what the MAXIMUM daily charge can be, but suppliers are able to charge less if they want to. Then they can work out what to charge per unit of energy used, They have to account within the maximum for the standing charge, and from that work out their maximum unit prices. But they can charge less if they want to - thus still allowing for some competition between suppliers.

    So a supplier could, if it wished, lower its daily standing charge, which would then allow it to raise its unit charges a fraction higher. They could reduce the Standing charge to zero if they wished. But in practice the suppliers charge close to if not the maximum figures they can for the standing charges, and then do the same for the unit prices.

    But those are supplier choices as OFGEM do not set standing charges or unit prices. OFGEM sets the MAXIMUM charges for electricity at zero consumption and at 3,100 kWh per annum. For Gas it's for zero consumption and 12,000kWh per annum. Providing the rates derived by suppliers do not exceed the maxima at the set levels of consumption then they are complying with the price cap.

    Prices are set by suppliers - not by OFGEM.

    RANT MODE OFF😎
    Last edited by meldrewreborn; 19-02-24 at 18:04.
    Current Eon Next and EDF customer, ex 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.
  • TAYLOROY's Avatar
    Level 1
    @PeterT_EONNext

    Good news maybe, but what about ev tariffs.

    I'm looking to swap to an ev tariff very soon and I am currently looking around.

    Can you see eon improving there EV tariff offerings.
  • PeterT_EONNext's Avatar
    Community Team
    @meldrewreborn Nothing wrong with a bit of a rant! 😆

    I fully appreciate that SC is always a sore point, and there’s been some rises to these over the last few years (somewhat significantly). They can, and do make up a significant portion of every households energy bill.

    The good news is, we’re now seeing the wholesale costs of energy fall, which will subsequently be seen (and felt) in all of our bills. The SC makes up a lot of those generation to home costs and we will always try and keep them as low as we can (hopefully, they will come down once associated costs of distribution fall)

    It’s worth mentioning as well somewhat on this point, that we are still actively lobbying the government to introduce a social tariff for those most in need, which would effectively see a reduction in both SC and unit rates if said tariff can be achieved for offering.
  • PeterT_EONNext's Avatar
    Community Team
    @PeterT_EONNext

    Good news maybe, but what about ev tariffs.

    I'm looking to swap to an ev tariff very soon and I am currently looking around.

    Can you see eon improving there EV tariff offerings.

    WATCH THIS SPACE! 😉

    Moving into a greener future, it’s imperative that we can offer a competitive EV tariff (with the base cost of the 7 hour off-peak currently at 9.5p/kWh) and the day rate being based around the current daily price cap rate. Our team are aware of this, and will be looking into the pricing of our EV offerings going forward later this year.
  • retrotecchie's Avatar
    Level 92
    @meldrewreborn Nothing wrong with a bit of a rant! 😆

    I fully appreciate that SC is always a sore point, and there’s been some rises to these over the last few years (somewhat significantly). They can, and do make up a significant portion of every households energy bill.

    Rises which have absolutely nothing to do with distribution or operating costs but more to do with the mug punter paying for failures in the supply industry. Failures like energy suppliers going bust which costs us all £23 a year, the failed smartmeter rollout at around £18 a year whether we have one or not and a soon to be added £16 a year so us conscientious and honest bill-payers can offset the debts of delinquent customers.
    Don't shoot me, I'm only the piano player. I DON'T work for or on behalf of EON.Next, but am willing to try and help if I can. Not on mains gas, mobile network or mains drainage. House heated almost entirely by baby dragons.
  • PeterT_EONNext's Avatar
    Community Team
    @retrotecchie Important points raised as always!

    The inclusion of failed suppliers falls under distribution/operational costs to the appointed Supplier of Last Resort I’m afraid to say (not that I agree fully, that it’s fair on the way those costs are distributed)

    My (personal) opinion is, that SC does need to be reviewed sooner rather than later, so that it’s both fair from both a business and consumer perspective, where it’s more affordable and sustainable.

    The Smart Meter rollout falls a little to the side of these costs, but you’re right in saying that we all pay for this in one way, shape or form.
  • PeterT_EONNext's Avatar
    Community Team
    @retrotecchie it’s also worth a mention, that your meticulous energy monitoring via your standard credit meter is always ever so welcome and admired!
  • Mailman's Avatar
    Level 55
    Numbers to be released by Friday 23rd (latest) 🔍