The Energy Cap

In summary the energy cap fixes the standing charges and pence per unit so the average households bill will be at £2500 according to their usage.

If you use more energy than the average household, you’ll be spending more than £2500.

edit - ignore

£2500pa is assuming average household use. Use more energy than average, and you'll be paying more.

where can i find out what the average is?

edit - or what is being used as the average in these calculations?

Have they announced the new capped standing charges and unit prices yet?

https://www.ofgem.gov.uk/energy-policy-and-regulation/policy-and-regulatory-programmes/default-tariff-cap

I’m currently paying £246 on DD which is clearly more than £2500pa.

£2500 is the BBC's way of dumbing it down for the average person, you'll need to look at the actual unit cost per kWh, which was set to go from 28p to 52p in October. It'll now be capped at around 35p if the rough % increase works out - £1971 to £2500 average bill is 26% more.

So based on that I can expect my bill to increase by 26%?  Gulp.

Not as yet, but:

Pre-announcement it was £3,549 for a typical household (Oct-Dec'22)
So if the new typical amount is set to be £2,500

So ~30% less than the caps detailed here:
https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-if-energy-price-cap-affects-you

Yes its going to go up from the 1st October, but not as much as it was supposed to.

Pre-announcement it was £3,549 for a typical household
So if the new typical amount id set to be £2,500

So ~30% less than the caps detailed here:
https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-if-energy-price-cap-affects-you
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Sounds right - 35-36p/kWh I think. And maybe some standing charge changes + gas price unit changes.

 

There is not £2500 price cap, there's a cap on the standard charge and the kwh charge. it's just a crap way of explaining it.

So based on that I can expect my bill to increase by 26%? Gulp.

Yes. But it would have been going up by 85%.

So instead of paying around £455 a month you'll be paying around £310.

That's based on just the electric unit cost increase. And that you're on a standard flexible tariff.

There is not £2500 price cap, there’s a cap on the standard charge and the kwh charge. it’s just a crap way of explaining it.

I don't believe that's true. I think energy companies are free to blend their standing/kwh rate as long as the total for a average house (defined by ofgem) is under the limit. So they could whack it all on the unit and have zero unit charge, or the other way round.

Have they announced the new capped standing charges and unit prices yet?

It is INFURIATING that these numbers aren't published immediately, and is normally hard to find when it is. The headline figure is totally useless!

The price cap is given as 2 numbers per region.

1 - the "nil" consumption cap. This is the maximum amount a supplier can charge for a year as standing charge
2 - the average consumption cap. This is the maximum amount a supplier can charge for a year of average consumption (3100kWh for electricity, 12000kWh for gas), this amount includes the standing charge

To work out the max for the standing charge you divide the nil consumption cap by 365.
To work out the max for the unit rate you subtract the nill consumption charge from the average consumption cap and then divide by the average consumption.

e.g For the October cap (before it was just superseded today). In the North West region, the cap for electricity (flat rate metering), when paid by direct debit is:

nil consumption: £150.38
average consumption: £1665.67

So the max standing charge in that region is 150.38/365 = 0.412
And the max unit rate is (1665.67 - 150.38)/3100 = 0.4888032258

and then you need to add VAT.

You will still pay for the gas and electricity you use. But the government's Energy Price Guarantee will limit the price that suppliers can charge for each unit of energy.

For a typical household - one that uses 12,000 kWh (kilowatt hours) of gas a year, and 2,900 kWh of electricity a year - it means an annual bill will not rise above £2,500 from October. Without this intervention, that annual bill would have been £3,549 a year. Last winter it was £1,277 a year.

However, if you use more gas or electricity than that, you will pay more.

This guarantee will last for two years.

Found the figures that the BBC use for their 'typical household' figure at least.

Should be able to work out the new caps from that.

Edit: the post above is why news outlets use generic 'average household' figures because most people don't have a scooby how many units of energy they use, let alone how much they pay per unit/standing charge...

Found the figures that the BBC use for their ‘typical household’ figure at least

Its not a BBC metric, its an Ofgem metric.

https://www.ofgem.gov.uk/publications/ofgem-updates-price-cap-level-and-tightens-rules-suppliers

Ahh, cheers. Still it's stupid that you have to dig to find out these basic figures being used for the calculations. 😡

Just keep an eye on this:
https://www.moneysavingexpert.com/

We are getting the 400 too which has the net effect of lowering your bill.

Last time I checked.

the average consumption cap. This is the maximum amount a supplier can charge for a year of average consumption (3100kWh for electricity, 12000kWh for gas)

BBC are quoting 2900kWh for Electricity, and says usage above those average figures would be a higher price. (Considerably higher I expect, a bit like the offsetting idea on here last week)

Just checked my bills and I use substantially less gas at 3950kWh, but above average Electric at 4050kWh.

We are getting the 400 too which has the net effect of lowering your bill.

Currently only for year 1 though.

All the media outlets do say 2900kWh, even ofgems website talks about 2900kWh, however ofgem have 3 values for electricity usage

1800kWh - low
2900kWh - medium
4200kWh - high

If you look at the official docs for the cap they clearly state it is for 3100kWh "benchmark"

Well I won’t be the only one to receive a letter from Bulb today with a projection.

Ours is projection to go from £2700 to £3450 based on last years historical usage.

£288 a month from £96 a month in 2021. Ouch.

I had an email from Octopus last week with my revised pricing based on my current electricity usage of 3600kWh/yr:
Current annual cost: £1,243.17
From Oct 1st without Gov support: £2,119.58
From Oct 1st with Gov support: £1,473.63

Above prices do not include the £400 rebate.

No gas in those numbers as we're on oil for heating.
We're trying to reduce usage now that my three girls are all away at Uni.

So I wasn't far off:

£2500 is the BBC’s way of dumbing it down for the average person, you’ll need to look at the actual unit cost per kWh, which was set to go from 28p to 52p in October. It’ll now be capped at around 35p if the rough % increase works out – £1971 to £2500 average bill is 26% more.

From here: https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022

If you’re on a standard variable tariff

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 Octobe

Got this today from Bulb

We're increasing our electricity unit rate from 27.838p to 33.763p per kWh and electricity standing charge from 49.646p to 50.665p per day.

We're increasing our gas unit rate from 7.335p to 10.276p per kWh and standing charge from 27.219p to 28.484p per day.

£23 a month in standing charges before I use any gas or electricity

£23 a month in standing charges before I use any gas or electricity

How can we encourage our customers to be green and use less energy but maintain profits... Let's keep putting the standing charge up!

Got this today from Bulb

We’re increasing our electricity unit rate from 27.838p (29.239p) to 33.763p (35.056p) per kWh and electricity standing charge from 49.646p (37.928p) to 50.665p (38.936p) per day.

We’re increasing our gas unit rate from 7.335p (7.344p) to 10.276p (10.309p) per kWh and standing charge from 27.219p (same) to 28.484p (same) per day.

Well thats odd, also from bulb mine is slightly different- the numbers in bold are what I've been sent - regional variations? I'm in outer London.

Interestedly when you factor in the £400 my bill goes up.... £400. Conspiracy theory?

The unit rate cap is an average for the country, it differs by region.

My gas is going up approx 25% assuming similar use to last year 😕

No idea why that posted twice!

I was a little surprised by the gas increase, lower than I'd expected (7.343p to 10.327p per kWh. -Bulb NorthWest). Electric is 33.254p to 38.652p per kWh and our night unit rate from 8.831p to 10.264p, its an EV tariff so I'm waiting to see what the normal tariff is before deciding if I stick with it.