Variable price change, OVO Simpler Energy Plan and the Ofgem price cap

Thank you Firedog.  That is a very convoluted way to charge customers for any product isn’t it ? My electricity use charges ( not standing charge ) have been in excess of this ‘cap’ since at least October 2023, EVERY month.

OVO ( and presumably anyone ) can evade my overcharge issue by saying ‘not to worry : other customers have been charged less** so on average its all OK’ : nothing to see here.  

The term ‘cap’ should mean maximum : per customer, not a vague average. Can I be the only customer to query this ? Really ?

Not trying to be difficult , I know you don’t set charging policy !

thanks Robert.  

** how would anyone ever know ?

First, I’d refer you to two documents explaining what the price cap is and how it works. These are backed by legislation, so OVO have no say in what the levels are from time to time: Energy price cap and Energy price cap (default tariff) policy | Ofgem.

If you’d like me to have a look at your bills to see whether there’s anything untoward, I’d be happy to. Just the middle bit of page 2 (‘Electricity in detail’) of a couple of recent ones should be enough; make sure there’s no personal information showing. We should soon be able to spot anything strange about them.

Thanks Firedog,

OVO do have a say over their peak & off-peak rates being charged, neither is set by Ofgem !  

I find it strange my bills always average out in excess of this alleged ‘cap’ ? ( An incorrect term in plain English ). My excel calculations drills it down exactly.

But wait ! Mrs Biggins round the corner is being undercharged , to balance out my overcharge to ensure the “cap isn’t exceeded”. This is the logic of the madhouse.😲

OK I will cut & paste last couple of bills shortly.    Robert.

 I’m sorry I’m not being clear enough in my explanations.

Up to a point (Lord Copper). Ofgem do impose a distinct limit on the peak/offpeak pricing for prepayment customers: the cost of E7 should be less than the single-rate cost if offpeak consumption is more than 42% of the total. This is a sort of benchmark that suppliers are expected to use to set their rates by. However, I spent an hour or two crunching some numbers and I was surprised to discover that this percentage (offpeak/total consumption) for the tariffs I’m currently being offered by OVO has dropped to 30%. It’s still no good for me: unless I use the night-storage heaters, my offpeak/total percentage is about 15.  

However, I thought you might benefit from seeing the results of my labours, so here they are in graphic form (a click on the image will produce a bigger one in a new window in most browsers):
  

The blue bars show the range of Ofgem’s typical consumption values.  

You’ll see that the cost on a single-rate tariff coincides exactly with that of an Economy 7 tariff where offpeak usage is 30% of the total. This strikes me as pretty generous, considering how much higher they could have set it.

The single rate is the one that is governed by the price cap, which lays down the maximum annual cost for the ‘average’ household on a standard variable tariff paid by Direct Debit. What this means for any specific household will depend on its location and - of course - on how much energy it consumes. 

Bearing all this in mind, I’m really keen to see your evidence of being overcharged.

@Robert Beisley sounds like you may not be using a sufficient proportion of your total electricity usage in the off-peak period to make the Economy 7 tariff work for you.

That’s just what I’m trying to find out., but Robert’s gone quiet on us.

I can’t check his figures for Jan/Feb/Mar 2024, because it’s not easy to track down OVO’s historical tariffs. However, using their current SVT rates for the Eastern region (unit rate 27.61, night rate 15.90 and single rate 24.05 p/kWh ex VAT), we can compare what a month’s usage of 350 kWh would cost if the split were (a) 100 night/250 day and (b) 150 night and 200 day:
 

    100 kWh x £0.1590/kWh + 5% =  £16.70
    250 kWh x £0.2761/kWh + 5% =  £72.48
    Total                                             £89.18 (effective rate: 24.27 p/kWh)

    150 kWh x £0.1590/kWh + 5% =  £25.04
    200 kWh x £0.2761/kWh + 5% =  £57.98
    Total                                              £83.02 (effective rate: 22.59 p/kWh) 

    350 kWh x £0.2405/kWh + 5% =  £88.38

I wonder if this helps at all.

Sorry for silence, been busy elsewhere.

I’ll cut & paste my elec bills for past 3 months & try to attach in next hour or two.

That’s a very impressive graph Firedog , from couple of weeks ago, well done 😃 ! 

I have copied my Elec charges for first Q of 2024 and now on an excel file.

Hopefully I’ve attached correctly.

Columns B & C is the data from OVO.

Columns E-J are my extrapolations of these.

You will see the cap of 0.2812 per KWH is exceeded . I’m in Eastern area . 

Incidentally the earlier cap to 31/03/23 was 0.266 & was exceeded on my bills Oct-Dec23. 

Not shown on this excel. Grateful for review of 2024 data !

I don’t think I attached my excel file, and indeed can’t see a way to do that.

Do you know how ?

Sorry, but file uploads (other than images) aren’t allowed here for security reasons. Only Forum Moderators and trusted Forum Volunteers can do that.

If you need help though, reach out to forum@ovoenergy.com and one of the Mods can help you out.

Electricity

Meter readings

Charges

Electricity

Meter readings

Charges

Electricity

Meter readings

Charges

As I can’t attach excel file I’ve just copied my charges JAN-APRIL 24 and shown here/above.

My Elec charge for the first of these 3 months is :

KWH , peak & off-peak combined.      261.369

Cost GBP                                                 75.76.

Average cost per KWH                        0.2898

CAP                                                        0.2812

I’m excluding S/C & VAT.

This is a consistent pattern :the overcharge was higher in next 2 months. Also occurred every month in last part of 2023 when cap was 0.266 per KWH.

But please have a look & tell me what’s gone wrong.   

Even if this charging policy is all “fine & dandy” (….really ??? … ) why is it called a CAP ?

From Cambridge dictionary definition of CAP, quote = a limit on the amount of money that can be charged or spent in connection with a particular activity….unquote.

Another case of misleading the public ?

Anyway please advise any observations.   Thank you in advance.

Thanks for the figures. As we suspected, you’re using too little offpeak electricity (varying from 17 to 23% of total usage) for it to be worth your while to be on an Economy 7 tariff.

These tariffs were introduced decades ago to make use of cheaper overnight electricity when the power stations are still producing, but demand is much lower. They are commonly used to charge up night storage heaters - heat up a load of bricks - that then gradually discharge the stored heat during the day as the bricks cool down. For this to be worthwhile for the supplier and distributor, the rate charged during peak hours is significantly higher. 

You appear to have a multi-rate smart meter, so you might consider asking OVO to switch you to the single-rate tariff. There would be no other change than peak usage would be charged at the same rate as offpeak usage. Note, though, this this change is currently irreversible: you apparently can’t change your mind and go back to an Economy 7 tariff. 

Look up the rates for your region, meter type and payment method on this page: plans.ovoenergy.com and work out how much you could save by doing this. You’ll see a lot of tariffs on that page, so be sure to pick the right one to compare with. You should find that they’re the same as I used in my illustrative calculations here: “current SVT rates for the Eastern region: unit rate 27.61, night rate 15.90 and single rate 24.05 p/kWh ex VAT.” You’ll see also that the standing charge is about 1% (£2 PA) lower.

It was precisely for people in a situation like yours that I wrote the article I referred you to: 

• A discussion: To stay on Economy 7 or not

I should have mentioned that there are nowadays a couple of other use cases for Economy 7 (E7) tariffs:

• Charging electric vehicles (EV) overnight. EV charging at home is fast becoming the biggest consumer of electricity for many customers, so it makes sense to take advantage of cheaper overnight rates. 
• Charging batteries overnight to store electricity for use during the day. 

 
It’s not certain that E7 will always be with us; night storage heaters are fast being supplanted by heat pumps, and some suppliers like OVO have alternative, even cheaper solutions for EV owners. Domestic batteries will have to come down in price a great deal for it to be worth it for the consumer to to take advantage of an E7 tariff in this way. And as demand for tariffs like this falls away, suppliers will soon think about abolishing them entirely in favour of other Time of Use arrangements, like Octopus’s Agile plans.  

Thanks Firedog,

Night storage heaters ?   What on earth ?

Multi rate smart meter = yes.

I’ve never had night storage heaters & guess the economy 7  charges ( high / low rates) are a hang over from previous eras. 

I’ll check out the OVO single rate tariffs that you helpfully 😎 provided the link to.

I wonder how many other customers are paying above the Cap ( seriously why is it called that ? ) without even realising. I bet the answer is = loads. Although the charges are itemized each month it’d certainly be beyond many folks to do the detailed drill down. The concept of cap should mean exactly that **but it obviously doesn’t !

Ovo & presumably other suppliers are cheerfully billing above Cap levels !

best wishes Robert.

**Dictionary definition in my earlier post.

Good morning,

When will the new June energy prices be available I haven't found any information on the app or website and my IHM is still showing the April costs.

Silly me just realised that the energy prices go down on the 1st July 😀 definitely having a senior moment this morning 🤔🤪

Hi @Lucky2,

Glad you managed to resolve this yourself. 😆

Let us know if there’s anything else we can help with. 

@Shads_OVO yeah got there in the end 😀👍

Hi 

my current payg rates on smart meter vary to Ofgem rates electricity 1/7/24 

kWh higher and standing charge lower 

therefore the Ofgem prices can’t be relied from 1/10/24 

Hi @Fuzzycat ,

Try checking them against https://plans.ovoenergy.com .

It MUST be said that Ofgem only publishes the national averages - take them with a pinch of salt because there’s a 100% chance they’re not the rates that apply to your area.

Ofgem publishes the regional capped prices, too: Get energy price cap standing charges and unit rates by region | Ofgem

For single-rate tariffs, suppliers can’t charge more than the Ofgem figures. Beware of VAT, too. It’s included in the Ofgem figures, but not in the ones on OVO’s plans page.

@Firedog 

TG you mentioned VAT lol. My PAYG tariffs are the same as @Blastoise186 kindly linked. (After adding VAT 5%)