Price cap increases- To fix or not to fix?

Wow, this is even more of a flexible situation than I thought.

I just checked the newly offered ‘fixed loyalty’ tariff and entered the new figures into my spreadsheet calculation, then went back to check something and the figures being offered had already changed in that 5 minutes.

I still can’t work out just why OVO estimate my new DDs on Fixed Loyalty would be around £193 a month though when I calculate them at around £134?
That’s a £700+ a year difference.

The only explantion for that could be the anual usage figures, and I am using the usage they have on the website - so they must be using something else. (Something that is much higher than my actual usage).

Edit- I believe that I have found it.
In a recent email about the Jan price increases they have my anual gas usage as 31485 Kwh, on the website gas usage for 2023 is currently 8444 kWh, almost a 4x difference.

TBH though it’s still not the full story as if I put 31485 kWh for gas into my calcs then the DD would be around £274 a month.
Just divide the £2441.95 estimated for gas shown here by 12 to see what I mean.

Where that 31485 kWh is coming from I have no idea, but it could explain why they have constantly been trying to set my DDs too high.

email:

Account on website:

Well I’ve now found another, and quite different FAC figure on the Plan page of my account. (Thanks @Jeffus)

I’ve decided that I am going to get my gas reading up to date (the electricity is smart metered), then fix tomorrow, using the account renewals page, and then sort out the incorrect FAC’s and subsequently inflated DD before the first one is due in January.

As I noted above the Fixed Loyalty tariff has changed since I was first offered it, both unit rates and standing charges.Not great amounts but changed.
The original figures aren’t on the email just a link, but I had noted them at the time so that I could use them in calculations.
 

@Firedog @Nukecad 

Have you thought about the EON Next Pledge tariff which will track 3% below the price cap?

For info - my December DD went in today and so I’ve just pressed the fix button and got shown this:

That £187 is way too high but I now have a month to argue it down to the £133/£134 that it should be.

@Firedog  A screenshot from my calculation spreadsheet is below.
I still can’t work out where they are getting the £187 from.
It must be the FAC for gas but I have no Idea what figure they are using, and they have different figures in different places.

Even after fixing last night the fun and games continues.

I’m currently not even sure just what rates I have fixed at - the figures given in the two emails I was sent are different to the figures currently on the ‘Plan’ page of my account.

I’m going to give things a few days to settle down before getting on to them to reduce the DD amount, I may leave it until the new year.

VAT - of course that makes the differences showing there. (Slaps head, why didn’t I think of that).

As for the FAC I don’t think it’s because of metric vs imperial, but I suppose that it is possible that they have it wrong in the FAC calculation and correct in the biling.
The billing has been fine, the metric volumes as metered convert to the stated kWh.

I do apreciate that they are always going to overestimate slightly, just to cover themselves, but it seems too much of an overestimation.
I also note that we do agree on the FAC for electricity so they aren’t overestimating there.

I now have until 20th Jan before the next DD is due and they haven’t actually emailed me yet with a figure for the new DD. (So there’s still time for them to get it right).

I believe that I can now do this, and it’s quite interesting.

If I ignore the posted OVO FAC for gas and instead use double my own estmated anual usage for gas, (ie 18400 instead of my 9200) then using the rates including VAT it calculates out as a required monthly DD of £186.92.
That’s close enough for me.

So it looks as if the OVO DD calculator might have an erroneous doubling in there for gas usage? Or is being fed a figure that is twice what it should be? Or even being fed the correct figure twice?
Difficult to be sure without seeing the actual algorithms being used, but as I say interesting.

This was one of the main reasons why I chose to fix. When reputable prophets predicted an 8p/day increase in the standing charge for electricity on 1 April, I got my calculator out. The odd 0.05p/unit here or there makes little difference to low users like us, but an 8p hike in the SC means a guaranteed annual cost increase of ~£20. I suggest you do your own sums!

~~~ 🥴 ~~~

Christmas came early, visibility poor, I’m afraid ...

The average electricity standing charge from 1st Jan is 53.35p

The average standing charge from 1st April according to the latest Cornwall estimate is 58p

58-53.35 = 4.65p a day if a consistent 58p

£16.97 for a year increase.

It wouldn't take much of a change following the standing charge consultation to overcome that sometime over the next 12 months.

The unit rate may be well be over 4p a unit less from 1st April based on current average estimates from Cornwall Insight. I assume even low energy users are using more than 1kWh a day

These are all averages, unit rates and standing charges vary by region

It is impossible to know for sure @Firedog 

The fix price gives piece of mind. That is not a bad thing. I am definitely not suggesting you should take a risk with the standard tariff 

We know the ofgem announcement on the £16 debt going on the unit rate rather than the standing charge was announced prior to the Cornwall Insight estimate.

The £16 debt and rounding is relatively small but not insignificant compared with the drop in wholesale prices currently for many people but not for low users.

Quite a lot could happen as a result of the standing charge review.

Of course a new government and ofgem could do something unexpected quickly. 

The main thing currently is what will happen to the wholesale price of gas between now and 15th Feb when the calculation period for the Q1 2024 period finishes. It has been volatile so Cornwall Insight may well be wrong particularly for Q2, Q3, Q4. This is the latest price.

You may simply decide to fix for piece of mind.

Predictions are just predictions - AKA ‘best guesses’ - you have just seen that they change, and CI could be predicting something else next week. (And certainly will be by April)

You make a decision and you fix or don’t fix, that’s your own particular guess/gamble, and then you see how it pans out.

I made my decision to fix, based on current /Januarys SVT vs the Fixed Rates offered, and will now stand by that decision.
Personally I don’t see the point in wavering now just because someone else’s guesses have changed.

I’m fairly sure that CI’s guesses are closer to the truth than anything I could ever come up with. In particular, I think that their Q2 forecast for unit rates is likely to be close to whatever Ofgem settle on in just a few weeks’ time. My rationale for fixing was based on estimates that have changed significantly, and the new figures indicate that what might have been to my benefit before is no longer so advantageous. It’s a fairly safe rule that the most recent prophecy is more likely to be right than earlier ones. 

The last time I fixed my rates, for two years, it was just before the price cap went into orbit in 2021. That saved me an awful lot. Let’s see how we go over the next year.