Energy price cap – £117 price hike is the good news.
And the bad news? Some Economy 7 rates are up by over 60%.
Level 2 of the Energy Price Cap came into effect on 1 April 2019. From that date, energy suppliers have been allowed to hike the energy bills, of households on standard variable and other default tariffs, to £1254 (based on average energy usage).
Around 15 million households have been hit with an energy price hike of over £1.5 billion pounds all at the same time (give or take a day or two).
That’s a lot of money. Every day almost £5 million is flowing out of the pockets of energy consumers into the coffers of the energy suppliers, big and small.
But while the focus has been on the headline increase in the Energy Price Cap of £117, the reality is that, for certain customer groups, things are worse….much worse.
Price Cap v2 Analysed
Energy bills will be higher than before the Energy Price Cap came into effect
The table below shows the latest “Capped” prices for the Big 6 energy suppliers, together with comparable price levels before the Energy Price Cap came into effect.
The analysis shows that:
- Anyone hoping that the Big 6 would price below the level of the cap (Ofgem perhaps?) will be disappointed.
- The average increase for the Big 6 is £119 – slightly higher than the Energy price cap.
- With the exception of ScottishPower customers, everyone else is worse off than before the Energy Price Cap came into effect. On average energy customers are now paying £33 more than before the price cap, with some seeing net increases £57 (4.7%).
- ScottishPower customers are only doing better due to the fact that they were paying ridiculously high energy prices before the energy price cap came into effect.
| Supplier | Pre EPC (£) | EPC v1 (£) | EPC v2 (£) | Latest increase (£) | Latest vs Pre EPC (£) |
|---|---|---|---|---|---|
| British Gas | 1,205 | 1,135 | 1,254 | 119 | 49 |
| EDF Energy | 1,228 | 1,135 | 1,255 | 119 | 27 |
| E.ON | 1,208 | 1,137 | 1,254 | 117 | 45 |
| npower | 1,230 | 1,137 | 1,254 | 117 | 24 |
| ScottishPower | 1,257 | 1,137 | 1,254 | 117 | -3 |
| SSE | 1,196 | 1,137 | 1,253 | 117 | 57 |
| Average | 1,221 | 1,137 | 1,254 | 119 | 33 |
| Source | energyscanner.com | ||||
| Notes | EPC = Energy Price Cap |
If that’s already making you feel queezy and you’re ready to find a better deal….
But it gets worse.
If you have a standard electricity meter and pay quarterly by Cash or Cheque your increase will be closer to £123.
Where you have an Economy 7 meter and pay by monthly direct debit your increase will be £135.
If you have an Economy 7 meter and pay by quarterly by Cash or Cheque your increase jumps to £143.
So, if your bills are going up by just £117, you might consider yourself lucky – although you’re still paying at least £300 over a competitive market rate.
| Energy Price Cap (Default Tariff Cap) v2 | ||||
|---|---|---|---|---|
| Announced Runs from Runs until | 7 Feb 2019 1 Apr 2019 30 Sep 2019 | |||
| Fuel | Direct Debit Bill (£) | Change (£/%) | Standard Credit Bill (£) | Change (£/%) |
| Gas | 593 | +51 (+9.4%) | 636 | +54 (+9.3%) |
| Electricity (standard meter) | 661 | +66 +(11.1%) | 708 | +69 (+10.8%) |
| Dual Fuel (standard meter) | 1,254 | +117 (+10.3%) | 1,344 | +123 (+10.1%) |
| Electricity (economy 7 meter) | 815 | +84 (+11.5%) | 870 | +89 (+11.4%) |
| Dual Fuel (economy 7 meter) | 1,408 | +135 (+10.6%) | 1,506 | +143 (+10.5%) |
| Source; energyscanner, Ofgem |
Some Economy 7 customers have been totally screwed
Having seen Economy 7 customers’ bills increase dis-proportionately under the Energy Price Cap, we decided to do a bit of digging around. What we found was not pretty. Not pretty at all.
We fully appreciate that, when setting rates, the Energy Price Cap needs to considered in the context of the overall bill. However, the overall bill is based on a very specific consumption profile and will obscure the fact that customer usage profiles can vary considerably. Therefore, to gauge the impact of the Energy Price Cap on those Economy 7 customers who use a significant proportion of their energy during off-peak hours, we have analysed the increase in Economy 7 off peak rates across of range of energy suppliers.
The data for a number of energy suppliers, is shown in the table below. The analysis is by no means exhaustive, nor intended to be. Rather it has focussed on showing how different energy suppliers have implemented rate changes under the rules of the energy price cap. Those shown in the table have, in particular, made significant double digit increases in night time rates.
The data shows that;
- Average increases in Energy Price Cap headline bills can mask significant differences across different customer groups.
- Certain customers will have seen rates and energy bills increase by orders of magnitude more than the headline numbers (up to 61%).
- Vulnerable prepayment meter customers are not immune from significant double-digit increases.
| Supplier | Tariff | Pre EPC night rate (p) | EPC v1 night rate (p) | EPC v2 night rate (p) |
|---|---|---|---|---|
| EBICo | EBICo Standard | 7.94 | 6.99 -12% | 11.25 +61% |
| Total increase | +42% | |||
| PFP Energy | Fair, Simple, Clear | 10.25 | 13.05 +27% | 14.93 +14% |
| Total increase | +46% | |||
| Together Energy | Freedom Variable | 11.49 | 15.40 34% | Not yet announced |
| Total increase | +34% | |||
| Co-op Energy | Green Pioneer Prepayment | 9.58 | 9.58 +0% | 12.45 +30% |
| Total increase | +30% | |||
| Robin Hood Energy | Evergreen (Cash / Cheque) | 10.21 | 10.21 +0% | 12.36 +21% |
| Total increase | +21% | |||
| Source | energyscanner.com TheEnergyShop.com | |||
| Rates are for monthly direct debit payment unless otherwise indicated |
Comment
Joe Malinowski, founder of energy search site energyscanner.com commented.
“15 million households just found out that the Energy Price Cap is anything but. While the headline increase of £117 should have, by now, frightened all but the most spendthrift to switch to a better energy deal, the reality is some customers have done far worse.”
Joe Malinowski, continued.
“Under the price cap certain energy suppliers have hiked night time unit rates by 20%, 30% and some over 50%. We now have the perverse situation where supposedly cheap “off-peak” rates for some price cap protected tariffs are more expensive than standard rates of non-protected tariffs. How did that happen?”
Joe Malinowski, concluded.
“There is a clear message here for all customers on default tariffs. The energy price cap will not protect you from over-paying for energy. Indeed, it could cost you a lot more. A lot more than you expected.”
Been burnt by the Energy Price Cap? Ready to do something about it?
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Read more…
– What is the Energy Price Cap?
– Energy Price Cap Pros and Cons
– Where next for the Energy Price Cap?
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