Price cap increases- To fix or not to fix?

0.08*365=£29.20

just saying….

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It’s all theoretical to me, presumably due to being on a occult tariff

During the energy-price uncertainty, we’re not able to offer a fair priced fixed-rate plan. Our variable-rate Simpler Energy plan is the only one available at the moment. These prices are in line with Ofgem’s price cap.

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

You can see all current plans for your region, fuel type, meter type and payment method on this page: Our prices | OVO Energy

Little Christmas tip: three hyphens and Enter produces a horizontal rule in this editor.

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

You trying to ruin Christmas for me? The new Cornwall prediction came out the day I fixed, so I’ve still got a few days to cool off in. Back to the drawing board.

For a start, Cornwall’s figures are heavily rounded, so we should really be comparing the earlier forecast - 60 or 61p - to the current 53, which is where the 8p increase I quoted arose. Second, do we know whether the threatened £16 bad payer levy is included in Cornwall’s assessments?

The forecast reduction in unit prices from the Q1 figures is quite dramatic - 28.62 to 24.09 to 22.56 - and would have a significant effect on bills as you point out. I know you’ve been expecting something of the sort, based on your scrutiny of forward wholesale prices. I’ll have to dig out the old slide rule and crunch the numbers again, but at first glance it would seem that SVT would trump a one-year fix based on my usage (~3kWh/day).

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.

OK. I ran the numbers again with the latest CI predictions, with a bit of massaging. The rates in my part of the world tend to be about 95% of the national average, although the standing charge is probably a bit less than that. Anyway, using OVO’s SVT rates for Q1 and Cornwall’s predictions for Q2, Q3 and Q4, along with my own quarterly consumption figures for 2023 (including December 2022 instead of 2023), it looks as if the rates I fixed on would cost between £10 and £17 a year less than the SVT for the standing charge, but the fuel cost would be about £41 higher. I’m not happy with a fixed rate plan that could cost me £25-£30 more than the SVT and still saddle me with a £75 exit fee. 

I’ll be using your magic freephone number to cancel the fix later on in the week if webchat doesn’t work. Wish me luck! 

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.

That’s a confusing page. But I eventually whittled it down to see there are only two economy 10 tariffs on DB, which are both identical. So that explains why there is nothing to change to. I am stuck unless I want to change to a single tariff (which SSE said I could do, but I haven’t asked Ovo). I won’t do this yet, until I make my final decision about heating.

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.