VLOG

What is the government's Energy Price Guarantee?

  • 14 December 2022
  • 9 replies
  • 296 views
Tim_OVO
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The Energy Price Guarantee (EPG) explained

 

 

See OVO’s guide on the Energy Price Guarantee here

 

Had any questions or thoughts about this? Chat to other forum members by leaving a comment below.

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9 replies

D
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A little while ago OVO insisted that my monthly payments increased to £160 per month despite being over £400 in credit.

 

I now pay £160 per month and I am still in Credit. OVO immediately take £66 from that credit and pay it back into my bank without me requesting it. This means that I am actually paying less to OVO each month than I was when they imposed the increase to £160 per month. 

 

This is reducing my credit by £66 per month plus whatever my bill is. 

 

I believe OVO have done this so that in a little while they'll be able to impose another increase on me based on my existing credit and future bill predictions. 

 

I have asked them not to refund from my credit this £66 each month, obviously they've ignored this request. 

 

Why have they made the government support payment so complicated?

 

While I'm on, why don't they scrap the standing charges and increase the unit cost instead? 

 

 

Blastoise186
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Actually @Dean2709 , you don’t lose the £66 of credit. It’s the £66 that’s paid INTO your account via EBSS that gets refunded instead. You need to look for the line entry Energy Bill Support Scheme under Charges in Detail.

OVO is just being suuuuuuper transparent about it. Much more than they needed to in fact!

This is ultimately what the government wanted. For those on DD, either:

  • Drop the DD by £66 during the scheme
  • Take the full DD and send £66 back later

About 50% of the suppliers went one way, the rest went the other. This is a business decision for each supplier, which you cannot override.

Either way, the government money is meant to be in your bank account despite the name of the scheme. It was never meant to form part of your energy credit.

Standing Charges also are unrelated to this topic at hand, but oh well… They’re related to the costs of delivering the supply, so they’re unlikely to just be randomly scrapped since that in itself would likely result in higher unit rates.

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Jeffus
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There did use to be some suppliers that use to offer a tariff with no or low standing charges but higher unit rates. But these never got many customers and i haven't seen them from any supplier for a long time.

The government has mentioned they are looking into potential "social tariffs". Be interesting to see what features are suggested as options if it goes ahead

Blastoise186
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I did a sweep of suppliers offering zero standing charges just a few days ago. Nothing came back as being currently offered.

It seems that all the suppliers that offered such tariffs have either:

  • Gone bust
  • Been killed by Ofgem for rule violations
  • Withdrawn the tariff
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Jeffus
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I did a sweep of suppliers offering zero standing charges just a few days ago. Nothing came back as being currently offered.

It seems that all the suppliers that offered such tariffs have either:

  • Gone bust
  • Been killed by Ofgem for rule violations
  • Withdrawn the tariff

Yep. All the innovation around tariff is really related to Time of Use now. 

Basically everyone else is under ofgem price cap variable rate or towards the end of a fixed rate deal. 

The only thing we might see introduced is a social tariff depending on what the government thinks.

I only found one supplier with a reference to no standing charge but limited tariff options. 

 

S
Rank

I notice via your website and app, the energy price cap is showing as going up to 3000 GBP from July 2023 rather than reducing to 2074GBP

Is this an error or am I misunderstanding how the cap works? 

https://www.ovoenergy.com/pricecap

 

BPLightlog
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Userlevel 7
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I notice via your website and app, the energy price cap is showing as going up to 3000 GBP from July 2023 rather than reducing to 2074GBP

Is this an error or am I misunderstanding how the cap works? 

https://www.ovoenergy.com/pricecap

 

I think you might be confusing the Energy price guarantee with the price cap

https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022#energy-price-guarantee-from-1-july-2023-onward

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S
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Got it, thank you @BPLightlog !

Jeffus
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Userlevel 7
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I notice via your website and app, the energy price cap is showing as going up to 3000 GBP from July 2023 rather than reducing to 2074GBP

Is this an error or am I misunderstanding how the cap works? 

https://www.ovoenergy.com/pricecap

 

There is

1. The government Energy Price Guarantee. This is going up to £3000 on 1st July 2023

2. The Ofgem Energy Price cap. 

https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-if-energy-price-cap-affects-you

As the new Ofgem Energy Price cap is below the new Government Energy Price Guarantee, so the new  £3000 Government Energy Price Guarantee will be irrelevant for the vast majority of people at least from 1st July to at least 1st October

Hopefully OVO will update the page you linked to soon with something about the 1st July Ofgem price cap. 

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