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Why is the Variable Rate on Simpler Energy plan (even with the new price increase from Oct 1st) so much cheaper than the fixed rate plans?

  • 17 September 2021
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Why is the Variable Rate (even with the new price increase from Oct 1st) so much cheaper than the fixed rates?

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Best answer by Jess_OVO 18 September 2021, 20:39

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Thanks for asking a really important question, @sfellows99.

 

There are few things that come into play here. Fixed plans offer rates that have been locked in at a certain price, dependent on when we as a supplier purchase the energy. Variable plans have rates that can go up or down depending on the cost of energy, but are capped at a certain rate by Ofgem, the energy regulator.

 

Right now the cost of wholesale energy is actually more than the price cap limit, which means that Variable plans end up being priced less when compared to Fixed. There’s more discussion on wholesale cost increases on this topic. But if you are worried about your energy costs or in need of extra support, we’ve got more guidance on this help page.

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