[RichB182]

Can someone explain to me the cap please?

Do energy companies HAVE to raise it by the maximum of 54% or whatever it is??

How do they justify doing so knowing it will force so many people in to poverty?

Just for some context I live in a flat that only has electric and no gas

On the back of this my fixed rate tariff is coming to an end soon and will need to change for one that is affected by this bout of daylight robbery and I have been given the option of the "FLEXI" plan.

How "FLEXI" is it?? Its nice and tempting to see it being cheaper by nearly £70 a month (£220) compared to the security of a fixed rate tariff (nearly £300 a month) but will this be subject to this lovely raise come next year??

I always thought that using renewable energy was going to be cheaper and yet here we are paying through the nose for it. We would all be better off resorting back to heating through a coal fire and sharing a bath in front of said coal fire, sharing the same water because that is where we will be heading back too.

Its not like there are even any cheaper options out there now!!!!

The sheer greed showing here by company leaders will eventually come back to bite them on the backside.....

One final question.......


How do I set up a pay monthly for what I use as I will not be paying a direct debit come the end of my current tariff?

[meldrewreborn]

@RichB182

Hi. To answer your questions in sequence, NO the energy companies do not have to charge the maximum under the price cap, but as they are likely losing money at the moment its not at all surprising that they do. There is not one price cap, there are many and they affect fuels, regions, payment method, standing charges and unit prices -all by different amounts. The 54% refers to an average customer's increase - its certainly not a maximum

Re poverty - the energy companies are companies they exist to make a profit. They are not charities either. That's what Government has to address.

The flex account is a standard variable rate tariff (variable =flex!). Since it's almost certain that the price cap will rise in October again a fixed account look at likely price trends over the longer period. Whether the variable or fixed is better for you is a matter of personal choice. The last increases resulted in the electricity standing charge rising 73%, and the electricity unit price up 39%. The standing charge increase was so high because it included the cost of bailing out the suppliers that defaulted last year. The equivalent figures for gas were 4% and 82%. So what does the average increase of 54% mean to you? Precious little as you have no gas! But the more electricity you use the less your increase will be. If you used little electricity the most recent increase in standing charge of 73% would be very painful. But your fix means your prices missed the price cap increase in October 2021. Unit electricity prices are up, under the price cap, by 53% from a year ago. Spare a thought for gas consumers whose unit price is up 121% in the same period.

Renewable energy. Eon Next either produce or obtain credit for renewable energy that they pump into the grid. But the grid supplies all customers with a mix of electricity from all the generating sources. So its not possible to reflect just the EON cost to eon customers.

Greed. The energy companies supply arms are losing money at present. There is no greed there. But generators of electricity and suppliers of Gas are probably making excess profits at present. The figures will come out in due course, and BP, Shell, and Aramco have already disclosed their figures. The price rises are driven by worldwide demand for gas which is cleaner than coal for electricity generation. Supply is only growing slowly while demand is increasing rapidly, and political decisions regarding Russia are also increasing prices.

Not having a DD. DD is the cheapest way to pay, followed by prepayment and standard credit being the most expensive. Its up to you if you want to turn your back on DD for a more expensive way to pay - that's your right in a free society, but i can't recommend it to you.

You have been fortunate to have avoided the increases so far through the timing of your energy fix. My fixes went belly up last year when my suppliers both went bust and my deals with them. Nobody likes the situation, but we all have to live with it.

[meldrewreborn]

As a follow up to my post above its also true that the price caps, which were introduced to protect those who for one reason or another had never switched from their supplier and were paying inflated charges, in effect subsidising those who did switch and sought out cheaper fixed term contracts. Even after the price caps were introduced (we're into the eighth 6 month period now), it was still better to find a fix rather than remain on the Variable rate tariffs.

Its all changed now, and as has been observed fixes seem more expensive than variable tariffs. Fixed tariffs are not subject to the price caps, so are priced by the companies offering them above anticipated market prices. The price caps, because they are based on costs that now lie in the past, always lag the market, and because wholesale prices, particularly of gas, have remained very high, suppliers are probably losing money at the moment, although they know that future price caps will recompense them.

If (when?) prices start to fall fixes will once again be introduced at competitive rates. But that seems some way off at present.

[Mstty]

Unfortunately those coming out of a fixed deal now have missed the rise in Oct 21 and teh Apr 22 price cap rises so the shock will be big.

We too came from 14p kWh on a fix to 29.24 kWh so the pain is real.

Sadly even though gas is at a low price at the moment we are still destined for a rise of the price cap in Oct 22 of between 20-30% depending on who you believe.

The best thing to do is look at usage and see where you can save energy for now

[meldrewreborn]

@Mstty
Unfortunately? I would say they've done very well out of their fix. But yes the increases are massive.

Electricity standing charge on price cap is up 73% from a year ago. Unit prices up 53%.

Gas standing charge only up 2.3%, but unit prices up 121%.

I wish the press and OFGEM would make it clearer that the average increases are exactly that - averages which applies only in a specific set of circumstances. Quoting a range would be much more realistic.

[Mstty]

Yes it's always an unfortunate time to come off a fix whatever time it is in the current market.

Good for them, for us we have had cheap energy for decades, switching, earning cashback, getting better deal after better deal.

And now the energy market is where it is.

I agree they needed to make it clear the 54% rise only applies if you were already on the october price cap and applies to the unit price not the total for what your use.

Please note the average user is 12000 kWh gas and 2900 kWh Electricity

[meldrewreborn]

@Mstty
NO The 54% figure only applies if you were on the previous price cap and you use what OFGEM considers to be an average amount of gas and an average amount of electricity. Outside of that your total bill increase could be lower or higher - in some case very much higher if you use a lot of gas.