Energy bills, government ‘help’ and the like

[Beardy]

I submitted my meter readings to EDF yesterday and today received an updated bill of accounts. I’m a little confused by it.

I’ve got a warm homes discount, what ever that is and there’s some payments from the government, a loan I believe¹. Looking at the various parts of the bill, there’s the charges for electric and gas separately itemised by month. They’ve added these together as you’d expect and then reduced the total by the four payments of £66 and a further £140 warm homes discount. All fine and dandy, but they’ve also refunded me four payments of £66 each month as they have come into the account which would suggest they’ve double counted it. I think. I might be a bit confused.


1. I thought it was illegal to force a loan on people. I certainly didn’t ask them to lend me any money.

[Polar Bear]

If the grubbishment passes it into law it is no longer illegal.

[felstedrider]

It's not a loan.   

[felstedrider]

It's not a loan.

Bit more detail now that I'm not distracted.

Every UK consumer received £400 credit against their bills this Winter, Government funded.   It's paid to the energy suppliers as £66-67 a month for 6 months.   As it was dashed in a lot of the suppliers couldn't get their systems up to speed to deal with the ad-hoc credit so have chosen to pay it straight back to the consumer.   As an example, Ovo take £150 from my account early in the month and then pay me back £67 a couple of days a later.   It looks a bit messy but it's a temporary measure for this Winter only.   My last statement looked quite similar but the ins and outs reconciled back to my expectations.

The £400 was originally designed as credit for this Winter to be paid back over the next 4-5 years and collected back through energy bills.   The £400 remained after the last policy change but the requirement for it to be collected back was removed.

[Beardy]

I wasn’t aware of the policy change, so thank you for the info felsted.

I’ve also had another look at my bill and I’m sure that they have reduced my total usage charges by the £66/£67 along with the warm house discount and I know that they have refunded these amounts. This does look like they’re applying the money twice to my account nd I’m therefore quite sure they will correct their error later.

The warm house discount is the maximum cost thing isn’t it? Which again I’m mot sure I should be getting because I’m on a ‘welcome’ tariff following EDF picking up our account as a provider of last resort’ after our supplier went bust last summer.

[felstedrider]

I wasn’t aware of the policy change, so thank you for the info felsted.

I’ve also had another look at my bill and I’m sure that they have reduced my total usage charges by the £66/£67 along with the warm house discount and I know that they have refunded these amounts. This does look like they’re applying the money twice to my account nd I’m therefore quite sure they will correct their error later.

The warm house discount is the maximum cost thing isn’t it? Which again I’m mot sure I should be getting because I’m on a ‘welcome’ tariff following EDF picking up our account as a provider of last resort’ after our supplier went bust last summer.

There's 3 things :-

- Price capped to a notional £2,500 pa.   This will either appear as a credit or in a reduced consumption charge so maybe not completely obvious.
- £400 one-off credit (OK - 6 instalments).   Looks like this is working, but possible double counting.
- Warm home discount.  Details here - https://www.gov.uk/the-warm-home-discount-scheme.   You can check on the link to see if you should be getting it.

All this changes again from 1st April but the price fixing period is not yet done so we'll need to see where the price cap rolls out and how that compares to current rates.

[felstedrider]

This is something I just wrote up internally :-

"For anyone interested the UK Energy price cap is currently £4,200pa.   This is capped at £2,500 by the Gov’t and everyone was also given a £400 rebate on top.

From 1 April it is forecast that the cap will drop to £3,200pa BUT Gov’t cap will increase to £3,000.

With wholesale process dropping further it is currently forecast that the cap will drop to £2,200 from Q3 and into next Winter.

In summary prices will get a bit more expensive from 1 Apr (but usage is lower then), before dropping as we go into next Winter.


*all numbers for an assumed ‘average’ consumer*"



This is room full of energy professionals and quite a few people still don't look at their bills.

[robgul]

This is something I just wrote up internally :-

"For anyone interested the UK Energy price cap is currently £4,200pa.   This is capped at £2,500 by the Gov’t and everyone was also given a £400 rebate on top.

From 1 April it is forecast that the cap will drop to £3,200pa BUT Gov’t cap will increase to £3,000.

With wholesale process dropping further it is currently forecast that the cap will drop to £2,200 from Q3 and into next Winter.

In summary prices will get a bit more expensive from 1 Apr (but usage is lower then), before dropping as we go into next Winter.


*all numbers for an assumed ‘average’ consumer*"



This is room full of energy professionals and quite a few people still don't look at their bills.

Do you have the "per kwh" rates for the new cap please?       

[I'm trying to work out our likely cost post the end of April when our fixed ends - I have detailed consumption figures, just need to multiply by the cap kwh rates applicable . . . and the s/c]

[felstedrider]

This is something I just wrote up internally :-

"For anyone interested the UK Energy price cap is currently £4,200pa.   This is capped at £2,500 by the Gov’t and everyone was also given a £400 rebate on top.

From 1 April it is forecast that the cap will drop to £3,200pa BUT Gov’t cap will increase to £3,000.

With wholesale process dropping further it is currently forecast that the cap will drop to £2,200 from Q3 and into next Winter.

In summary prices will get a bit more expensive from 1 Apr (but usage is lower then), before dropping as we go into next Winter.


*all numbers for an assumed ‘average’ consumer*"



This is room full of energy professionals and quite a few people still don't look at their bills.

Do you have the "per kwh" rates for the new cap please?       

[I'm trying to work out our likely cost post the end of April when our fixed ends - I have detailed consumption figures, just need to multiply by the cap kwh rates applicable . . . and the s/c]

It's not finalised yet.   Assessment window closes 17th, Ofgem announcement 27th.

[felstedrider]

There was more detail than expected.

Latest view on cap was released yesterday - £3,338 annualised.   Expected unit rates as follows :-

Q2 SC:(£/day) Elec - 0.37, Gas - 0.31
UC: (p/kWh) Elec - 54.14, Gas – 12.65

This is still subject to change as we have another 9 days of wholesale price assessment.

[Edd]

There was more detail than expected.

Latest view on cap was released yesterday - £3,338 annualised.   Expected unit rates as follows :-

Q2 SC:(£/day) Elec - 0.37, Gas - 0.31
UC: (p/kWh) Elec - 54.14, Gas – 12.65

This is still subject to change as we have another 9 days of wholesale price assessment.

Interesting, I thought there was pressure on Ofgem to reduce the standing charge. If the numbers above hold, elec would be the same but gas would have gone up again. Does Ofgem have the flexibility to reduce the SC or is it determined by some predetermined formula/agreement, like the energy companies submitting their fixed costs over the last period?

[Mrs Pingu]

Eek, that's about double for electricity and triple for gas what my current fix is.

[FifeingEejit]

There was more detail than expected.

Latest view on cap was released yesterday - £3,338 annualised.   Expected unit rates as follows :-

Q2 SC:(£/day) Elec - 0.37, Gas - 0.31
UC: (p/kWh) Elec - 54.14, Gas – 12.65

This is still subject to change as we have another 9 days of wholesale price assessment.

 

Currently on
Elec: UR: 33.91p SC: 50.66p
Gas: UR: 10.28p SC: 28.48p

[felstedrider]

There was more detail than expected.

Latest view on cap was released yesterday - £3,338 annualised.   Expected unit rates as follows :-

Q2 SC:(£/day) Elec - 0.37, Gas - 0.31
UC: (p/kWh) Elec - 54.14, Gas – 12.65

This is still subject to change as we have another 9 days of wholesale price assessment.

Interesting, I thought there was pressure on Ofgem to reduce the standing charge. If the numbers above hold, elec would be the same but gas would have gone up again. Does Ofgem have the flexibility to reduce the SC or is it determined by some predetermined formula/agreement, like the energy companies submitting their fixed costs over the last period?

Given the allowed gross margin under the price cap formula is sub 2% (1.4% from memory) I suspect the majority of any standing charge increase will be due to pass-through costs.  The majority of fixed costs are metering, distribution standing charges and the pass through of the costs caused by other suppliers folding.  Bear in mind the numbers above are forecast by an industry consultancy (who I do rate) so it’s not entirely clear what assumptions they are using.  I might have more info next week.

[felstedrider]

Eek, that's about double for electricity and triple for gas what my current fix is.

My fix has another 2 years to run.  I just need Ovo not to go pop.

I’m still getting the £400 gift but I’ve been donating it to the local food bank as I shouldn’t have got it in the first place.

[phantasmagoriana]

Eek, that's about double for electricity and triple for gas what my current fix is.

It's double my current rates for both. Not looking forward to my fix ending later this year...

[andyoxon]

So glad I listened to "Do nothing" in Autumn 2021+   

[felstedrider]

So glad I listened to "Do nothing" in Autumn 2021+   

I could look clever by saying the industry saw all this coming but not many people did.  Ovo offered me a 3yr fix on Oct 21 which I ignored as I had never fixed for more than a year.  It was around this time that Russia started to reduce gas flows blaming technical problems.  It was a steady squeeze and prices rose.  I went back on the Ovo website early Dec and the offer was still there with a £100 exit fee so I signed up.  It was luck more than anything.

What can clearly be seen now is that the Russians were planning to squeeze energy supplies from mid-Summer 21.  That said the rise in wholesale prices has not been entirely caused by the Ukraine war despite Government rhetoric.

[Ham]

Want to feel even happier for leaving the EU ?

https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Electricity_price_statistics

TL;DR - We have the most expensive rates. Surprise.

[felstedrider]

Want to feel even happier for leaving the EU ?

https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Electricity_price_statistics

TL;DR - We have the most expensive rates. Surprise.

To be fair we had the most expensive rates before Brexit.

European countries have, however, reacted in a much fairer way, at least as far as the consumer is concerned, to the wholesale price situation.

[rogerzilla]

Work colleagues are pushing the Octopus tracker tariff at me (I assume there's a referral bonus).  It's not for the faint-hearted; you take all the risk and there is no hedging.  Even Octopus say it's best for people who can shift their usage around, I suppose by using battery storage or burning wood when gas is expensive.  You can get out easily, though.

[felstedrider]

This is something I just wrote up internally :-

"For anyone interested the UK Energy price cap is currently £4,200pa.   This is capped at £2,500 by the Gov’t and everyone was also given a £400 rebate on top.

From 1 April it is forecast that the cap will drop to £3,200pa BUT Gov’t cap will increase to £3,000.

With wholesale process dropping further it is currently forecast that the cap will drop to £2,200 from Q3 and into next Winter.

In summary prices will get a bit more expensive from 1 Apr (but usage is lower then), before dropping as we go into next Winter.


*all numbers for an assumed ‘average’ consumer*"



This is room full of energy professionals and quite a few people still don't look at their bills.

It is now largely expected that the cap-on-the-cap will stay at £2,500.   There's a budget update next week and the industry seems to think that Hunt will announce this then.

The cost of subsidising this Winter has been less than expected and, with the large collapse in wholesale prices, the future expected costs is now way lower than the treasury forecast last Autumn.   They have spare budget if needed.

[felstedrider]

And there we go.   Cap-on-the-cap stays at £2,500.

Not as big a win as might be expected as the £400 Winter rebate is gone.   The average consumer will use less during April-June so probably about flat in £s terms.

Current expectation is the cap will drop to £2,200 from Q3 so expect Government support to disappear by then.

[rogerzilla]

My bills go from £50 to £116 due to the end of the £400 subsidy 

[rafletcher]

£67 to £216 here - so that we're zero by April 2024, which we would never be (zero in April I mean) so I'm going to reduce it once I see next month bill.