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Price cap changes: supporting our members

  • 3 February 2022
  • 32 replies
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Price cap changes: supporting our members
Userlevel 7

Updated on 19/04/22 by Jess_OVO

 

Ofgem price cap announcement

 

Ofgem has announced that it will be raising the energy price cap on 1 April in response to the rising cost of energy.

 

We understand that lots of our members are feeling worried about changes to the energy price cap. That’s why we’ve pulled together some information here to help you understand what’s happening – and how we can help. If you’re an SSE customer, see this page. Boost Power customer? Then it’s this page

 

The price cap change applies to members on variable plans, and we’ll be in touch with everyone who’s affected over the coming weeks. 

 

If you need urgent financial support, we can help with this here.

 


32 replies

Userlevel 1

Why isnt the price cap ever given in price per unit. I have searched and find nothing.


The spend on a typical household is pretty meaningless.

 

The price cap really needs to be expressed in price per Kwh gas / elec.

Thanks.

Userlevel 6
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@ThinkingLlama Here's the average unit rates and standing charges, but these will vary slightly by region.

 

Userlevel 1

thanks
ouch.

Thats 81% increase on the gas which is the larger chunk of our bills.

OK, so 36% on elec but the PR and info from OFGem is misinformation.

They should just simply quote these unit rates.

This isnt 54%. Average over 57% increase on my usage.

 

Userlevel 6
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Yes, very few people live in an average house using 2900kWh of electricity and 12000kWh of gas!

Interesting to see that the unit cap ratio of electricity:gas has moved from 5:1 to 4:1.

Of course, tariffs *may* become available below the cap as they used to be in the good old days.

At least we now have some figures to work with, so thanks for this post. :smile::smile:

Are these figures fairly reliable?

I wonder why Ovo will not formally publish them??? I suppose the fixed rates will all run out by March?:worried::worried:

 

Userlevel 7
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@ThinkingLlama Here's the average unit rates and standing charges, but these will vary slightly by region.

 

Are these including VAT? 

Userlevel 6
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@Jeffus 

Yes, I believe this includes VAT.

 

Userlevel 7
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At least we now have some figures to work with, so thanks for this post. :smile::smile:

Are these figures fairly reliable?

I wonder why Ovo will not formally publish them??? I suppose the fixed rates will all run out by March?:worried::worried:

 

Strictly speaking, it’s not so much a case of OVO not wanting to publish the new rates and more of a case that OVO can’t publish the new rates until they take effect on the 1st April 2022.

Userlevel 6
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Strictly speaking, it’s not so much a case of OVO not wanting to publish the new rates and more of a case that OVO can’t publish the new rates until they take effect on the 1st April 2022.

I expect they would need to give a minimum of 30 days' notice. So expect pricing by beginning of March.

I’m on the OVO variable rates ( cheaper than fixed currently). OVO say that the price cap only effects the variable rate….is this correct? If the variable rate goes up significantly , will the current fixed plans still be available? 

Userlevel 7
Badge +1

Hi there @Darreno !

That is correct. The Ofgem Default Tariff Cap only affects Standard Variable Tariffs (such as OVO’s Simpler Energy tariff), Deemed Contracts running on the Simpler Energy tariff (in OVO’s case) and prepayment tariffs like the ones offered by Boost. It doesn’t have any effect on Fixed Rate Tariffs.

As for whether the current fixed rate deals will remain open? I’m afraid I don’t have a crystal ball and can’t predict the future there. All I can say is that if you want to lock in the rates you’re seeing today, then you’ll need to lock them in before midnight tonight to guarantee them as they can change at anytime.

Thanks for the advice. When the price cap increased last year the OVO variable rates where still cheaper than the fixed , so here I am still on variable. I’m worried that OVO might increase their fixed prices as well as their variable on the 1st April. 

Userlevel 2

I found the latest Martin Lewis article very helpful, and it was very accurate for my situation.

I’ve just taken the Ovo Member Special 1 year fix, which is approximately 59% more expensive than today’s price cap. Given my expected usage (3100 kwh Elec, 11100 kwh Gas) I’ll be paying the same as if I’d moved to the new 1/4/22 capped variable rate (assuming Ovo charge the maximum) and if the also cap increases another 20% on 1/10/22. I’m taking the fix as an insurance, on the basis that if I get it badly wrong I can break out of the deal for £60.

As mentioned, the fixed deals do change. The deal I’ve just taken is £100 worse than the deal I was first offered when I was emailed about contract renewal in December, and that offer has since been withdrawn.

I believe that it’s possible to calculate the exact capped rates per region based on this spreadsheet, but Ofgem don’t make it easy. The relevant sheet is “1a Default tariff cap”. The top table “Other Payment Method” = You pay by Direct Debit, “PPM” = You use PrePayment and “Standard Credit” is you pay by any other method.

If you look at the top table (Other Payment Method = Direct Debit, Single-Rate Metering Arrangement = you’re charged the same rate regardless of time of day), the GB average inc VAT for the Nil kWh column is £165.48, divide this by 365 to get the standing charge = 45.34 p. The £1044.11 average quoted in the m(3,100 kWh) column is the total cost including the standing charge, so to get the unit rate (per kWh) it’s (£1044.11 - £165.48) / 3100 = 28.34 p per kwh. These figures match the average figures for the new cap quoted above.

The second electricity table to the right (Multi-Register Metering Arrangement) is if you pay different rates for your electricity depending on time of day.

Gas is calculated in a similar way, except you divide by 12000 kWh for the unit rate.

To calculate the charges for your region, first check which region you’re in if you’re not sure; I used https://www.energybrokers.co.uk/electricity/pes-distributor-areas and https://www.energybrokers.co.uk/gas/gas-network.

Then find the appropriate rows in the spreadsheet, and repeat the above calculations, remembering first to multiply each figure in the table by 1.05 to add in the 5% VAT increase.

Hope this helps!

Userlevel 2

On a related but slightly separate note, the emails I got to confirm my new tariffs both started:

“Hi Graeme

Thanks for staying with us for another 12 months of carbon-cutting energy! Your new fixed-rate plan will officially kick off on DD/MM/YYYY.

There’s nothing you need to do, just enjoy it.”
 

Can you feedback that Ovo might want to change the wording of the last sentence, as I don’t think anyone will be enjoying the new tariffs.

Userlevel 7
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Hi @ludwiggj ,

Sure thing. I can’t do that myself, but I’ll definitely ask @Tim_OVO to stop by. He should be able to pass this on for you.

If you spot anything else like that, feel free to let us know here on the forum. :)

Userlevel 7


Strictly speaking, it’s not so much a case of OVO not wanting to publish the new rates and more of a case that OVO can’t publish the new rates until they take effect on the 1st April 2022.
 


I expect they would need to give a minimum of 30 days' notice. So expect pricing by beginning of March.
 

 Just to clarify things a little here - the reason the exact unit rates and standing charges aren’t published on our website, is down to the fact that there is regional variance between the rates even on the same plan. As @nealmurphy has mentioned, we’ll be in touch with any members on our variable Simpler Energy plan at least 30 days before to let them know what their new rates will be on April 1st.

 

 

Can you feedback that Ovo might want to change the wording of the last sentence, as I don’t think anyone will be enjoying the new tariffs.

 

This is some really valuable feedback, @ludwiggj and I wanted to let you know that I’ve already forwarded this on to the team.

Thanks all for some really great contributions to this thread. :slight_smile:

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Its very complex to work out but by my calculations if the V2G export tariff is not increased in April, when the electricity price goes up, the cost of charging the car overnight will be considerably more than the export payment I would receive at peak times. Is this correct? 

Userlevel 7

Thanks for raising this question about the implications of the price cap on those currently receiving V2G export payments from OVO, @IanJBelper.

 

It’s something that has been flagged by others in the same position so check out this recent response from our Smart Home team. 

standing charge details need to be given

my electric april unit and standing charge higer than price cap  by ofgem

Userlevel 7
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Hey there @robot7 !

I’m Blastoise186, one of the forum volunteers and an OVO member. :)

What tariff are you on, if you don’t mind me asking? The only one that OVO offers which the Ofgem Default Tariff Cap applies to, is Simpler Energy as that’s OVO’s Standard Variable Tariff. If you’re on any of OVO’s other tariffs like Better Energy, Better Smart Energy, OVO Drive or 2 Year Fix then the tariff cap doesn’t apply because these are Fixed Rate Tariffs and OVO is allowed to set the rates above the cap on the basis you know what you’re agreeing to.

The other thing I’m wondering, is whether you looked at the wrong rates perhaps? The tariff cap is different depending on where you are in the UK, so that might also explain it.

i was migrated from  sse  standard svt to ovo simpler energy.  ofgem website gives  average price caps  so i must be in more expensive area   RG6  and will try to find it but i do not know why it is dearer than average

i believe increase in standing charge its to pay bailout failed   suppliers

Userlevel 7
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Hi @robot7 ,

Please search the forum for existing threads before creating new ones, it helps to keep things tidy and avoids unnecessary clutter. It’s also easier to reply to your existing thread as well, as I would get notified and could reply there.

The increased standing charges are applied across all suppliers due to a number of factors. The cost of picking up the pieces from failed suppliers is just one of them.

Userlevel 1

my electric april unit and standing charge higer than price cap  by ofgem

Think OVOs prices are still competitive hard to compare now you can not move suppliers
My mothers account is just coming out of contract and opted to go PAYG which i always thought was more expensive than standard variable.

Well rates are cheaper than my variable at EON and EON have emailed me new rates from April   standing charge  54.8p  unit rate  28.6  per kw  :frowning2:    

 

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