Why can't I see my Government levy £170 reduction

​@costeek 

Basically the average use applies to nobody because nobody uses exactly the average. And the average cost or savings doesn't exist because all the Regions are priced differently from the average. You might as well ask what is the length of a piece of string which in your case turns out to be £23.90. If indeed it's right.

The old pedant can’t resist, sorry …

I think you’ll find that Ofgem always refer to the ‘typical’ household or consumer. Their reasoning:

Those ‘few’ consuming large amounts would skew the average (the mean) unhelpfully, so the median consumption (the amount that half of households use less than and the other half more than) is reckoned to be a more suitable measure.    

Hey ​@costeek 

I’m glad to see everyone’s already stopped by with some helpful advice for you already, Firedog linked to a helpful article on the webpage that details more on how the levy will be delivered for each customer sub-section.

We do also have a post on the Forum which you can check out below too, but ultimately as Firedog noted, it’ll be applied to unit rates rather than a lump sum payment onto the account. We’ll be contacting customers soon with their new estimated costs, and you’ll be able to see your new rates from 1 April. 

If you do have any more questions, do let us know.😊

I’m an Agile Octopus user and Greg Jackson has just sent me an email to say that for Agile customers … we will apply the full government discount to your dynamic Agile Octopus unit price …

Now, for those who don’t know, Agile is a dynamic tariff and each half hour settlement period is priced differently. It can go from 99.99p / unit (ouch) to -19p a unit (yes, I get paid to use power). I use about 7,000 kWh a year with my EV and HP etc and that would mean my discount, if applied to every HH price would reduce my bill by about £245.

For that to be true then even my negative priced HH slots would be reduced by about 3.5p i.e. -10.0p would become -13.5p. An awful lot of units are priced at zero (it’s the way the market works when there is too much of renewables on the grid) now become -3.5p for me.

I’m not saying this is true, I’ve asked on my other forum is that can possibly be true and we may find out after the 1st April if it is true. If it is I’ve definitely come out as a winner in this. (surely not)

Peter

This is just how it should be done IMO. I don’t know how the costs that have been diverted from energy bills are levied on suppliers, but Ofgem quote them as a price per unit delivered. There is probably a regular estimated payment coupled with a reconciliation, perhaps at year-end. The figures we’ve seen for the amount of the reduction are derived from Ofgem’s current estimates of the size of the levies:

ECO (Energy Company Obligation): £8.91/MWh of electricity supplied, £3.15/MWh of gas
RO (Renewables Obligation): 75% of £33.06/MWh of electricity  

For the electricity supply, then, the cost reduction is 8.91 +  24.80 = £33.71/MWh or 3.37 p/kWh. Add 5% VAT to get the 3.54 p/kWh. For gas, it’s just 0.315 + 5% = 0.33 p/kWh.

The rebate shouldn’t vary at all with the amount you’re paying per kWh - it should depend solely on how many kWh your supplier delivers. It will be interesting to see whether OVO do their sums like this. If you have 4,000,000 customers each using 2700 kWh a year, that’s 10.8 million MWh. Dropping your revenue from one month to the next by £33.71 x 10.8 x 10⁶ = £364 million/12 = £30 million a month while you’re probably still paying off what you took in last (fiscal) year might be painful. 

[E&OE as always!]