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Price cap changes: supporting our customers

  • 3 February 2022
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Price cap changes: supporting our customers
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Ofgem price cap changes

 

We understand that lots of our customers are feeling worried about changes to the energy price cap. That’s why we’ve pulled together some information here to help you understand what’s happening – and find out how we can help. If you’re an SSE customer, see this page. OVO Energy member, then see this page

 

What the price cap is and why it’s rising

 

The energy price cap is set by the regulator Ofgem, and it puts a limit on the prices that energy companies can charge for variable tariffs.

 

These tariffs are priced in line with the cost of wholesale energy (the price we pay to buy energy from the companies that generate it).

 

Wholesale prices have risen significantly – high above the price cap. Which means suppliers have had to buy energy for a much higher price than they’re able to sell it for.

 

On 1 April 2022 Ofgem is raising the price cap to reflect the rises in wholesale prices.

 

Financial support: we’re here to help

 

If you’re struggling to pay for your energy, please know that we’ve supported lots of people in similar situations – and we can support you too. Our dedicated team can also make sure you’re receiving any financial assistance from the government that you’re eligible for – and take you through payment support schemes that are available. You can find out about these in the section below too. Find out more


10 replies

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I can maybe understand why the unit rate has gone up by 40%, energy prices are rising.

But why has the standing charge gone up by 64%, surely the cost of maintaining the infrastructure doesn’t change that much ?.

 

 

 

 

 

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A really important question this one, @Buzby.

 

Just to give some context we’ve got more information on the upcoming unit rate price changes on our website:
 

What the price cap is and why it’s rising

 

The energy price cap is set by the regulator Ofgem, and it puts a limit on the prices that energy companies can charge for variable tariffs.

These tariffs are priced in line with the cost of wholesale energy (the price we pay to buy energy from the companies that generate it).

Wholesale prices have risen significantly – high above the price cap. Which means suppliers have had to buy energy for a much higher price than they’re able to sell it for.

On 1 April 2022 Ofgem is raising the price cap to reflect the rises in wholesale prices.

 

 

But why has the standing charge gone up by 64%, surely the cost of maintaining the infrastructure doesn’t change that much ?.

 

Unfortunately rising costs aren’t only affecting unit rates. As you mention the upcoming price changes will also see an impact on the daily standing charges you’ll pay.

 

These standing charges are applied to cover the cost of maintaining an energy supply network, which are also seeing a price increase due to a multitude of factors such as the smart meter rollout, as well as the costs involved when an energy company goes into administration. There’s more details on the Ofgem website here.

 

We understand that these rising costs are concerning and have put together some FAQs and additional resources to help here.

Userlevel 1

“These standing charges are applied to cover the cost of maintaining an energy supply network, which are also seeing a price increase due to a multitude of factors such as the smart meter rollout, as well as the costs involved when an energy company goes into administration. “

So, just to confirm here, what you are saying to us all is, when privatized energy companies fail consumers are being forced to foot the bill for what?, the remainder of their contractual obligations to infrastructure that would normally have been paid for from those failed companies profits?

 

Well their customers were shifted to other companies and profits are still being had from those customers so why the hell are you all making us pay and not calling out those companies who took on those customers who are evidently not taking up the additional costs of infrastructure that would have been paid for from the profits of those customers at their previous failed companies. Someone is getting profits for nothing while the rest of us are getting shafted. 

 

I look forward to your reply, from someone who has seen his energy price per Kw rise by 54% in 24 months and his standing charge rise by 56% on top while wages for myself and indeed anyone in the bottom 45% of income earners is the same as it was 40 years ago once we account for inflation. So I have not a clue where you all expect this extra money to come from other than from the mouths of children and in compromise of payments for the home in which they live. A few peanuts from the warm home discount wont solve this yawning chasm that is going to swallow the already dwindling economic future of millions of people, just so you fully understand and appreciate the magnitude of what you are doing, a smiling customer service outlook wont cut it.

 

Regards.

 

Luc G.

Hi I live alone and I am a vulnerable adult I am autistic and adhd and on a prepayment meter ( smart one ).

What support is there for me, I am worried about getting in debt or having to top up all the time and not affording it. I am scared to put my heating on and I cook via gas. I've turned every plug socket off apart from freezer and WiFi and the cats water fountain currently sitting in bed with an aran jumper on in blankets 

 

 

Hi , I am autistic / adhd 

 

I live alone with 2 cats , I have no support at all, i use a portable shower head for 10 mins to save water and energy. And only have WiFi on and cat fountain on. And the fridge freezer. All other plug sockets are off. Unless I have a coffee or pile the washing up ( by hand) and do one big dish wash..

 

I wash my bed sheets every 2 weeks. I only use a quick wash for clothes. My thermostat is on 15 or 10. I wear jumpers around the house with blankets and a hot water bottle. 

 

I am on prepayment meter smart one and i am also ptsd I am scared of getting into debt (never been in debt) and scared I have to keep topping up and I can't afford it. I cook on gas too. I don't know how to submit a reading. Or what my cost is as being autistic when it was sent out my new price I lost the said email ( due to adhd I misplaced or lose things all the time) and I don't understand written information or what it means being autistic having no help or support and alone. I don't know what to do. 

 

Its why I have come here. And being a customer. I need to know what helps is available to me. No one is telling me anything. Yes I've seen the Martin Lewis thing but I can't understand words or information anything written. Its hard to fathom when you have a learning disability and a neurological one and the adhd. 

 

Someone please help me. 

 

 

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Welcome to the Boost forum, @Kerrilarkin86.

 

I understand that these upcoming price changes can be worrying. Have you taken a look at the additional support and advice we’ve given here yet? This might help point you in the right direction in terms of getting financial support or applying for any benefits you might be eligible for.

 

As you’ve mentioned you’re a vulnerable customer, we’d also really recommend speaking to our Support Team to make sure you’ve been added to our Priority Services Register. You can find out more about this free scheme and the extra support it offers over here. You may wish to make an application online here too.

 

It’s really important to reach out to the Support Team if you’re worried about being able to afford a top-up. The team are happy to help and can be reached via webchat or by calling 0330 102 7517

Hi 

 

I am on benefits but it my benefits cover other out goings too. Like I said I can't fill on forms or understand things. Its very well you giving me this information but I can understand it with said learning difficulties I think I am on the priority list but no one has phoned me or emailed me etc 

Hi, obviously I knew about the price hike but Im shocked to see that in just 36 hours I have used near enough the same amount that would normally last me 1 week which by my calculations works out more than the 54% increase that I was expecting.  So my question is: is this how it’s going to be from now on?  I’m really panicking now 
Lisa

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Hi @Lisamariejones75,

 

Thanks for posting here. We’ve moved your post across to this topic we’ve made on the recent price changes as there’s some extra support and advice we’ve provided above.

 

Have you been checking the daily costs on your smart meter In-Home Display? If so it’s worth checking that the unit rates on your device have been updated correctly. You can check these against the prices which were confirmed in your price change email/letter at the start of March. If there’s any discrepancies between the prices shown on your letter and the device, please reach out to our Support Team who can help get these corrected.

 

I hope this helps.

“These standing charges are applied to cover the cost of maintaining an energy supply network, which are also seeing a price increase due to a multitude of factors such as the smart meter rollout, as well as the costs involved when an energy company goes into administration. “

So, just to confirm here, what you are saying to us all is, when privatized energy companies fail consumers are being forced to foot the bill for what?, the remainder of their contractual obligations to infrastructure that would normally have been paid for from those failed companies profits?

 

Well their customers were shifted to other companies and profits are still being had from those customers so why the hell are you all making us pay and not calling out those companies who took on those customers who are evidently not taking up the additional costs of infrastructure that would have been paid for from the profits of those customers at their previous failed companies. Someone is getting profits for nothing while the rest of us are getting shafted. 

 

I look forward to your reply, from someone who has seen his energy price per Kw rise by 54% in 24 months and his standing charge rise by 56% on top while wages for myself and indeed anyone in the bottom 45% of income earners is the same as it was 40 years ago once we account for inflation. So I have not a clue where you all expect this extra money to come from other than from the mouths of children and in compromise of payments for the home in which they live. A few peanuts from the warm home discount wont solve this yawning chasm that is going to swallow the already dwindling economic future of millions of people, just so you fully understand and appreciate the magnitude of what you are doing, a smiling customer service outlook wont cut it.

 

Regards.

 

Luc G.

 

Its can be summed up in one simple saying:

"Privatise the profit, socialise the losses"

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