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

The price capped rates for each region are given on this page:  Get energy price cap standing charges and unit rates by region | Ofgem. You’ll be looking for the multi-rate figures. If you’re not sure which region you’re in, see  this map. The regions broadly match the old Electricity Board areas.

Ofgem doesn’t dictate how Economy 7 tariffs are to be split between peak and offpeak; it’s up to the supplier to decide, so long as the average household’s costs are kept within the overall price cap. They do dictate for prepayment customers, though, that the split should be such that it’s cheaper to be on E7 if the offpeak usage is at least 42% of the total. You may find that OVO are more generous. 

Thank you Firedog & Blastoise,

Yes using these Ofgem rates : Electricity S/C & unit rates paid by direct debit, multi rate ,gives unit rate of 28.12 per KWH. My region is Eastern.

However combining my off-peak & peak usage for Jan/Feb/March 2024 gives an average that is in excess of this 28.12 each month. On the face of it I’ve been overcharged.

Who should I contact do you think ?

thanks again, Robert.

The price cap isn’t based on your own averages - but the averages of the average user.

You may not have been overcharged. I personally consider it unlikely tbh

Perhaps I haven’t explained myself very well. 

I don’t want to show my detailed excel workings but my Elec multi rate usage for J/F/M 2024 means I have paid for these 3 months at 28.99/ 29.15/ 29.62 . The eastern cap is 28.12.

The obviously excludes daily standing charge.

If 28.12 is the correct cap ( eastern region) then I’ve been overcharged.

Have I missed something ?    Maybe …….  but I can’t see it. Ideas welcome !

That’s not the way it works, I’m afraid. Ofgem set the cap for the ‘average’ household, then suppliers set peak/offpeak rates that would keep bills within the cap for an ‘average’ household. Of course, no household is average, so everyone’s bills are different.

If you’re paying more for your electricity on E7 than you would on a single rate tariff, you should consider whether E7 is right for you. It’s seasonal, of course, but if you’re paying over the odds in half of the winter months (assuming there’s some electric heating involved), you might have a look at the note I wrote on just this topic: A discussion: To stay on Economy 7 or not | The OVO Forum (ovoenergy.com) 

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.