Money saving expert Martin Lewis has produced his latest information about the rises in consumer energy bills set to hit us all in a few weeks.
Ofgem, which regulates our energy bills have calculated the energy price cap on behalf of the UK Government. This ‘is a backstop protection‘. The price cap limits the rates a supplier can charge for their default tariffs. These include the standing charge and price for each kWh of electricity and gas (the units your bill is calculated from). It doesn’t cap your total bill, which will change depending on how much energy you use.
It applies if you’re on a default energy tariff, whether you pay by direct debit, standard credit or a prepayment meter.
If your supplier has stopped trading and you are switched to a new supplier you are likely on a price capped tariff.
It won’t apply if you:
- are on a fixed-term energy tariff
- have chosen a standard variable green energy tariff Ofgem has exempted from the cap.
Contact your supplier to check if you are on their default tariff.
Standing charges are a daily fixed amount we pay suppliers for our gas and electric. It varies by region due to the different costs to transport power to where we live. In Orkney we produce over 100% of the electricity we require for our needs but that electricity is fed into the National Grid and transported south. We then buy it back at the highest rates there are in the UK. More information here: Check if the energy price cap affects you
On Thursday 8th of September the UK Government announced the Energy Price Guarantee for Households and Businesses.
Energy Price Guarantee From 1st October, a new ‘Energy Price Guarantee’ will mean a typical UK household will now pay up to an average £2,500 a year on their energy bill for the next two years. This is automatic and applies to all households. This will save the average household at least £1,000 a year based on current energy prices from October and is in addition to the £400 energy bills discount for all households. This applies to all households in Great Britain, with the same level of support made available to households in Northern Ireland.
On 1 Oct the current price cap will be replaced by a roughly 27% higher ‘price guarantee rate’ set to last for two years – taking a typical bill from £1,971/yr to £2,500. That’s for a ‘typical’ UK bill .
The £400 flat reduction for all homes this winter remains – take that into account and the average rise over your current cost is 6.5%. In practice you will either receive, or get your bill reduced by, £66 or £67 each month from Oct 2022 to Mar 2023.
The price guarantee is a cap on standing charges and unit rates.
The cap varies by region and how you pay, so for full info see…
– Direct debit price cap by region
– Prepayment meter & payment in receipt of bills price cap (still to come).
Price cap standing charges and unit rates for gas and electricity on direct debit by region from 1 October 2022
| Gas | Electricity | |
| North West | Unit rate: 10.29p per kWh Standing charge: 28.49p per day | Unit rate: 33.50p per kWh Standing charge: 43.26p per day |
| Northern | Unit rate: 10.19p per kWh Standing charge: 28.49p per day | Unit rate: 32.24p per kWh Standing charge: 49.93p per day |
| Yorkshire | Unit rate: 10.29p per kWh Standing charge: 28.49p per day | Unit rate: 33.08p per kWh Standing charge: 49.55p per day |
| Northern Scotland | Unit rate: 10.29p per kWh Standing charge: 28.49p per day | Unit rate: 33.08p per kWh Standing charge: 51.07p per day |
| Southern | Unit rate: 10.50p per kWh Standing charge: 28.49p per day | Unit rate: 34.23p per kWh Standing charge: 44.41p per day |
| Southern Scotland | Unit rate: 10.29p per kWh Standing charge: 28.49p per day | Unit rate: 33.81p per kWh Standing charge: 50.66p per day |
| North Wales & Mersey | Unit rate: 10.40p per kWh Standing charge: 28.49p per day | Unit rate: 36.02p per kWh Standing charge: 48.6p per day |
| London | Unit rate: 10.50p per kWh Standing charge: 28.49p per day | Unit rate: 35.81p per kWh Standing charge: 33.16p per day |
| South East | Unit rate: 10.29p per kWh Standing charge: 28.49p per day | Unit rate: 35.28p per kWh Standing charge: 42.68p per day |
| Eastern | Unit rate: 10.29p per kWh Standing charge: 28.49p per day | Unit rate: 35.07p per kWh Standing charge: 38.94p per day |
| East Midlands | Unit rate: 10.19p per kWh Standing charge: 28.49p per day | Unit rate: 32.97p per kWh Standing charge: 45.77p per day |
| Midlands | Unit rate: 10.29p per kWh Standing charge: 28.49p per day | Unit rate: 33.71p per kWh Standing charge: 49.15p per day |
| South Western | Unit rate: 10.40p per kWh Standing charge: 28.49p per day | Unit rate: 33.81p per kWh Standing charge: 52.64p per day |
| South Wales | Unit rate: 10.40p per kWh Standing charge: 28.49p per day | Unit rate: 34.02p per kWh Standing charge: 49.17p per day |
| Assumes payment via direct debit and includes VAT (at 5%). |
Price cap standing charges and unit rates for gas and electricity on direct debit by region until 30 September 2022
| Gas | Electricity | |
| North West | Unit rate: 7.34p per kWh Standing charge: 27.22p per day | Unit rate: 28.02p per kWh Standing charge: 42.24p per day |
| Northern | Unit rate: 7.23p per kWh Standing charge: 27.22p per day | Unit rate: 27.09p per kWh Standing charge: 48.91p per day |
| Yorkshire | Unit rate: 7.28p per kWh Standing charge: 27.22p per day | Unit rate: 27.36p per kWh Standing charge: 48.53p per day |
| Northern Scotland | Unit rate: 7.34p per kWh Standing charge: 27.22p per day | Unit rate: 27.91p per kWh Standing charge: 50.05p per day |
| Southern | Unit rate: 7.48p per kWh Standing charge: 27.22p per day | Unit rate: 28.46p per kWh Standing charge: 43.4p per day |
| Southern Scotland | Unit rate: 7.34p per kWh Standing charge: 27.22p per day | Unit rate: 27.84p per kWh Standing charge: 49.65p per day |
| North Wales & Mersey | Unit rate: 7.37p per kWh Standing charge: 27.22p per day | Unit rate: 29.58p per kWh Standing charge: 47.58p per day |
| London | Unit rate: 7.52p per kWh Standing charge: 27.22p per day | Unit rate: 29.63p per kWh Standing charge: 32.14p per day |
| South East | Unit rate: 7.32p per kWh Standing charge: 27.22p per day | Unit rate: 29.48p per kWh Standing charge: 41.66p per day |
| Eastern | Unit rate: 7.34p per kWh Standing charge: 27.22p per day | Unit rate: 29.24p per kWh Standing charge: 37.92p per day |
| East Midlands | Unit rate: 7.28p per kWh Standing charge: 27.22p per day | Unit rate: 27.63p per kWh Standing charge: 44.75p per day |
| Midlands | Unit rate: 7.37p per kWh Standing charge: 27.22p per day | Unit rate: 27.87p per kWh Standing charge: 48.13p per day |
| South Western | Unit rate: 7.48p per kWh Standing charge: 27.22p per day | Unit rate: 28.41p per kWh Standing charge: 51.63p per day |
| South Wales | Unit rate: 7.44p per kWh Standing charge: 27.22p per day | Unit rate: 28.29p per kWh Standing charge: 48.15p per day |
| Assumes payment via direct debit and includes VAT (at 5%). |
Click on this link for more information: Energy Price Cap Calculator
Remember you will still have a bill to pay even if you use no energy. The UK Government has said it will announce what support it can give to those on Heating Oil in a few days. Click on this link for 8 heating oil need-to-knows
Remember also that this is our own money (via taxes we pay to the UK Government) being used to pay the energy companies who are reaping in massive profits.
Click on this link for: Get help with energy bills
See also:
Fiona Grahame
Categories: Local News
Well, the typical Orcadian home is a detached house. According to the UK government the energy price guarantee for a typical detached house is not 2,500 £, it is 3,300 £ (https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022). It is probably safe to say that Orcadian homes often are in quite an energy-inefficient state, so just for heating (if electric) residents are much more likely to use well above the typical average of energy. Therefore, many will pay much more than 3,300 £ a year.
So far, there are also no clear regulation how the energy price guarantee affects customers on economy 7 or 10 tariffs. Many of those customers in Orkney will already have adjusted their lifestyle to make use of “cheaper” off-peak energy, somthing which appears to be in the pipeline with an upcpoming Ofgem announcement expected soon (which sadly might be available only to people with smart meters). I haven’t found any published calculations from Ofgem what they intend to do about caps for day resp. night units.
Given that the government also introduced a “floor” (same source as above) for the ones who were lucky to have fixed their prices some time ago (that will make their day), I am not very confident that they find a reasonable and fair solution for any off-peak usage whether within existing tariff models or new ones.
Also, keep on reading the cited government publication… to the very end: nuclear, new oil and gas plus fracking… this won’t solve the current problems and it will additionally create new ones.
Finally, let’s just have a little bit fun with numbers: Let us just assume that the typical detached Orcadian home will (from October if not already) have electricity costs of around 4,000 £ per year (a rather conservative estimate based on what I said above). To escape fuel poverty, one would need to earn above 40,000 per annum. Of the 88 jobs our local council has currently advertised, just 5 positions would match this salary threshold. These include – obviously – the position of the Chief Executive, Payroll and Pensions Service Manager, Senior HR adviser and 2 head teachers.
26 jobs (of the 88) are “casual/relief” where “hours are offered on an as and when required basis” and some of these jobs may not even reach an annual income to cover the electricity bill, never mind guarantee a living.
In a region which generates so much clean energy it appears somewhat odd that the very same local authority which usually grants planning permission for renewable projects, such as wind farms etc., never acted with foresight although they must have been aware that the majority of their own employees would end up in fuel poverty because expected economic trickle-down effects have never materialised in the wider Orkney society and considerations of parallel or micro grids never came to mind when the authority was deliberating development proposals.
There was and is no resilience against any kind of crises in the system.