Energy price cap

[Bibio]

can anyone make sense of it?

from what i can read there is a new maximum of £2500 for your annual energy bill. does this mean i get free energy (ROFL) after i go over this as i'm already around £4k.

its all a bit confusing :confused:

[Seeker]

They used a figure of £2500 because that is the average yearly energy usage cost for a typical family home. Working backwards from that the energy companies work out the maximum unit cost per kW/h they can charge (for each unit) to equal £2500 for that typical abode. This gives the unit kW/h figure you will pay.

It assumes direct debit payment and a dual gas/electric bill.

This means that you will pay for each unit at that cost but it does not limit your bill to £2500 if you use more than the typical family home.

If the cap wasn't in place the energy companies could charge the market rate per kW/h for gas and electric which is much more at the moment.

Confused? You are not alone - even Thick Lizzie was saying you would not pay more than £2500 which is wrong and was pointed out to her (but which she kept repeating).

[Luckypants]

Yes of course it makes sense if you pay attention to your bill. As soon as anyone starts talking about 'average household' stop listening and start doing a little research. You should already know the UK is split up into various electricity regions and that the OFGEM price cap for the standard variable rate varies by region depending on how much local generation there is (broadly) and the cost of maintaining / upgrading the network (standing charges). The 'new' price guarantee they are blathering on about is basically setting the OFGEM price cap for the next two years at around 34p / kWh, just how much that is will depend on where you live. (see link below).

As the price is capped by kWh your bill will still depend on how much you use and is NOT limited to £2500 a year.

https://octoenergy-production-media.s3.amazonaws.com/documents/Energy_Price_Guarantee_Regional_Rates_-_Sheet1.pdf

https://www.gov.uk/government/publications/energy-price-guarantee-regional-rates/energy-price-guarantee-regional-rates

[Bibio]

hear that sound of a coin dropping (penny dropped) lol

so my gas and electric unit is fixed for the next two years. weirdly my standing charges are not varying that much same goes for my unit price. so i'll still be paying around the same but get £400 (like everyone) split into small £66 chunks (refunded due to paying DD instead of credit on my bill).

still think standing charges are a farce, after all we dont pay one at a fuel pump or at a charging point or even most broadband only services and its about time the Gov told ofgem to do away with them. add it to the unit price.

[Luckypants]

Yes, the £400 bribe is a separate thing to the price cap. It is called the Energy Bills Support Scheme. The price limit on the kWh rate is called the Energy Price Guarantee.

[embee]

I'm afraid it's another classic example of dumbing down. Those who think a lot of themselves and put themselves up for election as MPs also think the rest of us plebs are as thick as s**t and can't understand anything, so they try to make it simple but instead just complicate the whole thing. If they just said they are going to cap the unit price at 34p/kWh electrickery and 13p/kWh gas (or whatever it is exactly, BG have quoted me 33.018p and 10.237p) then it would be pretty unambiguous. The big kicker is the electric standing charge (45.769p/day !!!!!!).

On average a human being has less than 2 legs (or fewer .....).