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The value limit on the domestic energy market bill is reduced by 12. 3% from Monday 1 April, from £1,928 to £1,690. This is the amount an average family can expect to pay in a year if they have a combined fuel and electricity system. energy tariff and pay by direct debit or if they have a prepaid meter.
The cap, which resets every three months based on old wholesale energy prices monitored by Ofgem, the regulator, does not limit the amount of actual expenditures. This is a limit to the amount suppliers can charge for fuel and electricity assemblies. and the related ongoing costs.
Typical consumption rates for an average family (11,500 kWh per year of fuel and 2,700 kWh per year of electric power) apply to the amount of the limit.
Most people benefit from energy price lists that reflect value limits per unit of energy and ongoing charges, but there are a small number of cheaper offers where the value is fixed, for 12 months. comparison to see what you can have here.
These fixed rates often come with an exit payment if you need to replace your fee before the fixed rate ends during the period. They start at around £50 per fuel, but can be much higher. So, they’re worth considering if you think you might need to make a transfer in the short or long term if the limit drops further (note that exit payments can’t be collected if you have 42 days after the fee end date).
Market analyst Cornwall Insight predicts that the peak value will rise from £1,690 to £1,560 on July 1 before rising to £1,631 on October 1. Its estimate for the first quarter of 2025 is £1,634, although it is accepted that longer-term forecasts are inherently less reliable due to the vulnerability of wholesale prices to global events and weather-related demand.
In the winter of 2021-2022, the peak value is below £1,300, so even with the April 1 cut, it remains at a peak in old terms. The regulator, Ofgem, has opened a consultation on the future of price regulation. Having concluded that the existing arrangement will not work well as new lists of securities emerge with variable value structures based on source and demand (see story below).
Market regulator Ofgem is consulting on the future of its value cap, which limits the amount suppliers can rate consumers per unit of fuel and electric power they use, as well as related ongoing costs.
The maximum limit is set on a quarterly basis. It currently stands at £1,928, but from 1 April 2024 it will be reduced by 12. 3% to £1,690. This is the amount an average family can expect to pay in a year if they benefit from a combined fuel and electricity tariff. and pay by direct debit.
Actual expenses are decided through admission: the cap doesn’t restrict how much you’ll pay. It is decided through the evolution of wholesale energy costs in the 3 months prior to its entry into force.
Ofgem says the cap, introduced in 2019, has helped consumers overcome the worst effects of rising energy costs that followed Russia’s invasion of Ukraine. But critics point out that the government stepped in to restrict typical spending to £2,500 a year when the cap cap capped £3,000 in October 2022 and £4,200 in January 2023.
The consultation, which will last until May 6, will explore tactics in which the cap could evolve “for consumers to stay on as the energy market moves towards a smarter and more flexible system. “
This is the advent of ‘time-of-use’ price lists that offer electricity at other costs per day, allowing consumers to use appliances and appliances when overall demand for titles is low and unit costs are cheaper.
Tariffs are also starting to appear to meet the desires of a growing number of families charging their electric cars overnight.
Ofgem said: “Energy markets are transforming as more and more consumers shift their energy consumption and start using electric vehicles, heat pumps and solar panels.
“Our electric power sector, which is governed by renewable energy, will also praise consumers for changing the timing of their electricity consumption, lowering prices for everyone.
“As visitor diversity increases and more families adopt time-of-use rates, it can be more complicated to maintain a universal value cap that works for everyone. [We’re thinking] about how the value limit and energy regulation as a whole will be adjusted. , wants to make adjustments to make sure consumers are protected, continue to pay a fair price for their energy, and get the full benefits of net zero.
As part of the consultation discussion paper, Ofgem presented a range of features for the future of value limits, including:
Acquisition-only pricing is an offer that is only available to new customers. Lately there is a transitory ban on such offers, recently extended to 12 months, which has been implemented to prevent suppliers from subsidizing such offers with profits. of existing customers.
Ofgem is also recently reviewing more than 30,000 responses to its ongoing call for payments, which closed in January.
Responses to the value limit consultation can be submitted to Future_worth_protection@ofgem. gov. uk until Monday, May 6, 2024.
Ofgem, the energy market regulator, is cutting its price cap on fuel and electricity by more than 12% from April 1, a move that will shave £238 a year off usual expenses, writes Kevin Pratt.
The limit limits what providers can qualify for per unit of electric power they get and for related ongoing costs. For an average family with a “dual-fuel” fuel and electric tariff paid by direct debit, the limit will increase to £1,690 when replaced at the start of the next quarter.
This is a 12. 3% drop from the £1,928 cap.
The approximately 4 million consumers with prepaid meters will be subject to the same limit level, as Ofgem permanently removes the “premium” that in the past was added to their bills.
Those who pay when they receive their bill by check or cash will continue to pay for their energy at about 5% more due to the administrative costs involved.
The maximum limit, which is updated quarterly, does not limit the number of bills that are made through consumption. The “average consumption” figures assumed by the limit are 11,500 kWh per year of fuel and 2,700 kWh per year. year of electricity.
Ofgem says the April update will see energy prices reach their lowest point since Russia’s invasion of Ukraine in February 2022, helping to push wholesale fuel and electric power prices to record levels. Domestic prices followed suit, prompting the government to interfere in October of the same year. with its power worthy of guarantee.
This limited expenditure to an average of £2500 per year. Then, in the winter of 2022/23, families were sent government bills totalling £400 to subsidise expenses.
The value limit is as low as £1,300 at the beginning of 2021. Ofgem admits that consumers are suffering with the high cost of expenses, pointing to record levels of electricity debt of £3. 1 billion.
The new limit includes a payment of £28 per household, spread over a year, to prevent suppliers from cancelling bad debts. This amount will not be charged to users of prepaid meters because, due to the nature of their payment method, debt securities are not as chronic as those of credit meter customers.
Jonathan Brearley, chief executive of Ofgem, said the regulator is implementing measures for existing debt levels: “We will take a step back to look at the issues related to debt and affordability in the market for suffering consumers, which we will announce shortly. . .
“These measures highlight the limitations of the existing formula – we can only change the costs – and that is why we welcome the announcement that the government is opening the debate on the long-term regulation of value, the prospects on how people’s power arrangements can be made more flexible. so that consumers pay less if they use electricity when prices are lower.
“But in the long term, we want to think about what more can be done for those who simply can’t afford their energy bills, even if costs go down. As we return to something closer to normal, we have an opportunity to reset and rethink the energy market to ensure that it is in a position to protect consumers if prices rise again.
Ofgem says it is encouraging a reversal of price change, whereby consumers opt for a more competitive offer, reducing the changeover time to five days. It also abolishes the “market stabilization fee,” which requires companies to pay reimbursement to a new customer’s old supplier in the event of a change.
However, the regulator has extended its ban on “procurement-only” price lists for 12 months, a move that is perceived as a potential barrier to competition.
These fees allow businesses to offer deals exclusively to new and non-existing customers. They were banned over fears that competitive wholesale prices in times of uncertainty about wholesale prices could jeopardize the monetary stability of businesses if wholesale prices move against them.
Ofgem says it has made the decision not to waive the market stabilization payment and the ban on paid-only price lists, as doing either could jeopardize “a slow and culpable return to market normalcy. “
It says it wants to avoid “a return to risky behaviors that contributed to the increased number of supplier insolvencies during the energy crisis. “
The energy value cap will include an “adjustment” of £16 for the year between April 2024 and March 2025 if the regulator’s proposals to take on bad debts are given the green light.
The amount, equivalent to around £1. 33 per month for credit meter bill payers, would be used through suppliers to fund a range of customer measures submitted through Ofgem.
These came into effect (December 14) after being announced on October 18 (see article below). This includes helping clients with debt by:
Ofgem says existing debt levels, estimated at £3 billion, pose a threat to the viability of the provider. If companies were to declare bankruptcy, additional costs would be imposed on consumers as the market absorbed “orphan” consumers whose supplier had gone bankrupt.
The charge of awarding consumers to around 30 companies that went bankrupt due to the energy crisis caused by the war in Ukraine in February 2021 is estimated to be around £6 billion.
In Ofgem’s words, “bad debt” refers to the amount of money owed through consumers in the energy market that is unlikely to be repaid. The regulator says the adjustment of the value limit is to ensure that the burden of this increased debt is reduced in the future. as fairly as possible.
He said: “The scale of this debt means it is very important that suppliers have enough investment to ensure they can meet the strict regulations that Ofgem has put in place in relation to how they treat consumers facing payment difficulties. This value limit adjustment makes sure providers have the resources they want for consumers facing debt.
“Other sectors already routinely have provisions in place to charge bad debts into their securities. However, the regulated nature of the energy sector means that Ofgem can use the value cap mechanism to make sure those prices recover as successfully as possible. possible.
According to Ofgem’s proposals, any additional costs added to the maximum value would be passed on to consumers with prepaid meters.
This reflects the fact that many of those consumers charge the same debt point as credit consumers (who pay late), as prepaid meters operate on a “pay-as-you-go” basis. The consultation will run until 17 January. 2024. Details and how to respond can be found on the Ofgem website.
Ofgem, the electricity market regulator, is extending the value limit on domestic customers’ expenditures to 5% from 1 January 2024, starting in the first quarter of the year. The most recent figures from the Office for National Statistics show inflation at 4. 6% in October. .
For an average family paying a dual energy tariff (gas and electricity from the same provider) by direct debit, this is an increase of £94 in annual bills, from £1,834 to £1,928.
For consumers who pay using credits on receipt of a bill (cash or cheque), the default limit will increase to £99, from £1,959 to £2,058 for typical dual fuel consumption, while the limit for prepaid consumers will accrue up to £99 from £1,959 to £2,058. £1,861 to £1,960, back to average fuel consumption.
Ofgem says this increase “is almost entirely due to emerging prices in the foreign wholesale energy market due to market instability and global events, in particular the conflict in Ukraine. “
It says it will use “all levers” to ensure prices are spread out and that consumers who are suffering with their spending are supported.
The “average consumption” is estimated at 11,500 kWh per year for fuel and 2,700 kWh per year for electricity. Ofgem’s maximum limit does not limit bills, which will still depend on the amount of energy consumed.
The tariff cap is updated quarterly and limits the amount consumers can be charged per unit of power and at constant rates.
Earlier this month, Ofgem opened a consultation on the option of replacing or revising constant fees, which are paid regardless of intake and which many consider a barrier to reducing intake (this consultation will run until 19 January – see the story below for details). about how you can submit your feedback).
Ofgem boss Jonathan Brearley said: “It’s a difficult time for a lot of people, and any increase in spending will be worrying. But this increase, close to the levels seen in August, is the result of the increase in wholesale value. of fuel and electricity, which will have to be reflected in the value we all pay.
“It’s vital that consumers are supported and we’ve made suppliers transparent that we expect them to identify and offer to those who are suffering with their bills.
“We are also seeing the return of selection to the market, which is a positive sign and consumers can take advantage of a diversity of stock listings available now, providing the security of a constant rate or a more flexible one, as long as that is below the value limit.
“People compare all the information, look for independent recommendations from trusted sources, and think about what’s most important to them, whether it’s the lowest value or the security of consistent treatment. “
Today’s announcement confirms plans to eliminate the “prepaid meter premium” so that prepaid consumers are charged the same ongoing rates as prepaid consumers.
Previously, consumers with prepaid meters had to pay more to cover additional costs.
In addition to its proposal to permanently scrap the prepayment premium once government subsidies are removed in April, Ofgem also needs to reconsider how bad loan prices are split between consumers of popular credit (those who pay when they receive a monthly bonus or quarterly bill for a loan, the exact amount of energy used) and those who pay by direct debit.
If approved in one fell swoop, the proposals would save prepaid consumers around £50 a year, popular credit charges of around £45 a year, but would mean around £20 a year for direct debit consumers.
Ofgem will listen to the perspectives of all stakeholders on this proposal.
The value limit that will go into effect in April will be announced in February. Analyst Cornwall Insight predicts that the main limit will fall back to around £1,850 at this stage.
Ofgem, the energy market regulator, needs to know what others think about standing tariffs and how they can be replaced, writes Mark Hooson.
Energy consumers pay a steady payment to their suppliers as part of their bill, regardless of how much fuel or electricity they consume. Critics say this can have a chilling effect on reducing consumption.
Under the existing energy price cap, consumers can be charged up to 53 pence per day for electricity and 30 pence per day for gas. A new limit will be announced in the coming days and will come into effect on January 1, 2024.
Analyst Cornwall Insight predicts that the energy value cap (currently £1,834 a year for a typical family paying by direct debit) will rise by 5% to £1,931 on January 1, 2024. It states that this figure will be £1,853 for the second quarter. 2024. year, £1,824 for the third quarter and £1,863 for the fourth quarter.
It forecasts a sharp rise in electricity prices from April (up to 61 pence per day from 53 pence) due to a reform of grid prices through Ofgem.
Fixed prices can be compared to leasing a line through a telephone contract. Suppliers spend the profits they generate on the infrastructure they use to supply power.
Last month, figures from the Office for National Statistics showed that around 4 in 10 (39%) adults who pay their energy expenses said it was “very or difficult” to pay them.
Today, 16 November, electricity regulator Ofgem is asking charities, customer groups, businesses, suppliers and bill payers for their views on standing tariffs, and needs ideas on what they could be replaced with.
All interested parties, including bill payers, can email their perspectives to: StandingCharges@ofgem. gov. uk through Friday, January 19, 2024.
Tim Jarvis, Director of Markets at Ofgem, said: “We know that the current tariffs have caused a lot of debate in recent months and, with wider cost-of-living pressures meaning consumers will continue to struggle with their bills, it’s a smart solution. It’s time to look again.
Fixed-value lists are covered by the energy value limit, which limits the point at which suppliers can set them, but many still consider them unfair.
Fixed prices vary by region, with those in Merseyside and North Wales paying more than those in the South East of England. Energy consumers with prepaid meters have also traditionally paid higher constant rates than direct debit bill payers.
Prepaid consumers are lately subsidized through the government’s Energy Price Guarantee, but this will end in March 2024. Ofgem says it is running a replacement for this plan.
Although peak providers charge an ongoing fee, they are not required to do so. The few that don’t have constant rates, like Utilita, charge the rate to the unit rates of the energy they provide.
On the one hand, this means that consumers only pay for what they consume, but higher unit prices can disadvantage consumers who reduce their energy consumption, such as other people with disabilities, the elderly, and those who rely on medical equipment.
Jarvis said: “It’s a complex factor, and while a steady upfront payment to cover a supplier’s constant prices works for some, it doesn’t work for others. Similarly, another price distribution might help some, but our previous research found that it can also penalize some very vulnerable households.
“However we do it, there is a tricky balance to strike, so it’s vital that as many other people as possible respond to our call to contribute by sharing their experiences, how it affects them, and the alternatives imaginable. “
Ofgem’s research found that while the advent of a tax on the amount of energy supplied by consumers would benefit low-income families overall, a significant number of consumers could be worse off.
Their case studies show that around 1. 2 million low-income families with peak electric heating consumption would be worse off than those who would benefit from it.
Energy expenses will rise next year, according to analyst Cornwall Insight’s predictions about the regulator’s value cap, writes Candiece Cyrus.
The cap, which limits the amount suppliers can rate their consumers on constant prices and per unit of fuel and electricity they use, is set quarterly through Ofgem, based on wholesale energy prices.
Cornwall Insight predicts that the cap, which is adjusted quarterly, will increase in January from its current point of £1,834 per year to £1,923 per year (the figures are for an average energy family benefiting from a dual fuel tariff paid by direct debit). That’s higher than expected, £1,898 a year in September.
The analyst predicts that the cap will rise to £1,929 a year in April, fall to around £1,880 in July, and rise back up to around £1,917 in October, thus keeping it above its current point in 2024.
In September, the analyst predicted that the cap would fall below its current point from April next year, to £1,820, then to £1,781 in July before emerging to around £1,825 in the fourth quarter.
Cornwall Insight’s new forecast takes into account market volatility during the Israel-Hamas war, commercial activity at liquefied natural gas facilities in Australia, and damage to the BalticConnector pipeline in Finland.
Similar to Russia’s invasion of Ukraine, those occasions highlight the potential risk of disruption to the UK’s energy supply this winter due to falling temperatures.
National Grid ESO showed earlier this year that it would provide Demand Flexibility service this winter, giving families and businesses with smart meters the opportunity to take advantage of discounted energy costs by using fewer peak energy hours.
The service is used when there is a threat that energy demand will exceed supply.
Dr Craig Lowrey, Senior Consultant at Cornwall Insight, said: “Price cap forecasts since September have highlighted the vulnerability of UK energy stocks (and visitor spending) to geopolitical developments.
“Russia’s invasion of Ukraine has shown that there is a delicate balance in the global energy market, which can be seamlessly disrupted by unforeseen events, and it turns out that the existing scenario is repeating itself.
“The government wishes to take steps to proactively limit the effect such conditions have on the UK energy market and households already under pressure, rather than reacting to events as they occur. Interim measures such as social price lists and one-off invoices are useful, but they are not a long-term solution.
“While the UK will never be completely free from emerging global costs, reducing its reliance on imported energy and prioritising locally sourced sustainable energy will help protect the country from foreign energy crises and stabilise costs over the next decade.
Energy consumers may see nearly £3 billion added to their expenses to cover the charge of protective consumers when their suppliers went bankrupt in the 2021 energy crisis, writes Candiece Cyrus.
The House of Commons Public Accounts Committee says around £2. 7 billion of taxpayers’ cash has been used to cover the charge of moving consumers from 28 failing businesses, in the hope that this cash will be recouped on energy bills.
But the Committee says that figure could exceed £2. 9 billion once the charge of rescuing 1. 5 million consumers from the biggest corporate bankruptcy, Bulb, is taken into account.
The Bulb case alone has charged taxpayers a total of £3. 206 billion, and the government is only expected to receive £2. 96 billion from Octopus, which it acquired from Bulb consumers, and that figure depends on Octopus’ advertising success.
The Committee is concerned that the estimated deficit of £246 million could simply be borne by taxpayers at a time when household budgets are already under pressure due to the cost-of-living crisis.
The Committee added that some families who want to pay their expenses are not receiving it, stating that only 76% of the credit bonds that were issued to families with prepaid plans last winter have been repaid.
Some energy consumers have reported that they have earned their vouchers.
Dame Meg Hillier, MP and chair of the committee, said: “Our report is a sad reminder that we are still living with the consequences of the bankruptcy of so many energy suppliers in 2021-2022. Even though the government and regulators did the right thing by temporarily acting to protect consumers, the uncomfortable fact remains: the recoupment on this investment depends on the good fortune of a single company. The public cannot tolerate such uncertainty, especially in difficult economic times. “
An Ofgem spokesperson said: “Consumer protection is our most sensible priority and we have worked tirelessly with the government to implement measures to protect consumers from the effect of Bulb’s bankruptcy. Since then, we have taken a number of strong measures to strengthen the resilience of the sector to reduce the risk of long-term service defaults and limit the impact on consumers in the event of service defaults.
“We can, and do, reject licensing programs from new energy corporations when we are unhappy that the organization is resilient enough to cope with the volatility of the existing energy market. We also ask organisations to assess their control and assurance frameworks for supply to Ofgem. .
Ofgem, the market regulator, will ask energy suppliers to contact their consumers if they fail to meet two monthly bills or a quarterly payment, check if they are in monetary difficulties and, if so, offer support. This can be done through an affordable payment plan or a paid vacation, writes Candiece Cyrus.
In addition, providers will need to be available through tactile methods (such as phone, email, or website), prioritize requests from other vulnerable people, such as the elderly and others with disabilities, and offer informal contact methods. (such as a toll-free phone number) for those who are struggling to pay their bills.
They will also be required to post Citizens Advice visitor service ratings on their websites to allow families to make informed decisions when switching. The ratings are updated quarterly and cover points such as call wait times, email reaction times, invoice accuracy, and complaints. data.
The bonds, which came into effect on Dec. 14, are part of an attempt by regulator Ofgem to comply with the standards. They are the result of a consultation between Ofgem, customers, suppliers, consumer groups and charities, carried out in May.
Jonathan Brearley, chief executive of Ofgem, said: “With recent global events increasing pressure on fuel prices, it is highly likely that expenses will rise further. That’s why the industry wants to do everything in its power to provide smart service to visitors and provide debt control assistance. especially for the most vulnerable.
“Over the past year, we’ve noticed smart examples of suppliers stepping up their efforts for their customers. However, despite this, the feeling among those working on the frontline with vulnerable families is that there is still a lot of work to be done. .
“Long wait times to get through on the phone. Unanswered letters. Lack of empathy for people’s non-public circumstances. This wants to replace and today we lay out our expectations of suppliers this winter and how they will be held accountable so that consumers can get them more easily. Especially for vulnerable customers, we expect greater proactivity and a more comprehensive response.
Energy UK, which represents suppliers, has aligned with Ofgem and Citizens Advice to extend its voluntary debt commitment for winter 2023, outlining the tactics the 14 participating suppliers deserve from consumers (see update below).
However, Ofgem has also proposed a transience that increases energy expenses from April 2024 to prevent suppliers from going bankrupt, as visitor debt reached £2. 6 billion over the summer (see update below).
Households could face a one-off increase in their energy costs of up to £17 a year to prevent suppliers from going bankrupt, writes Candiece Cyrus.
Regulator Ofgem proposed the move as part of a consultation on how to prevent suppliers from going bankrupt due to visitor debt, which reached £2. 6bn this summer, its highest point on record.
In 2021, around 30 suppliers closed their doors because they were unable to pass on the increase in wholesale prices to their consumers on a sufficiently temporary basis. The burden of managing the move of their consumers to other businesses and maintaining the energy source added £82 to household energy bills.
The crisis has also led Ofgem to make quarterly rather than semi-annual capitalization adjustments, making it more sensitive to wholesale price movements.
The transience increase would be implemented with next April’s price cap and would last for three months, adding around £1. 50 to the average household’s monthly expenses (of £17 a year). The limit dictates the maximum amount providers can qualify. Consistent families with power unit and constant costs.
Such changes to the limit are allowed under their terms to allow providers to recover bad debts in a different way.
The limit has increased from £2,074 in the last quarter to its existing point for the fourth quarter of 2023 of £1,834 consistent with the year for a typical customer household, in Ofgem’s revised average usage decline figures to which it will refer from this month, in October. Based on their previous figures, the limit would be £1,923 per year for a typical household.
According to analyst Cornwall Insight, the cap will return in January 2024 to £1,898 a year and fall to £1,820 in April.
Unaffordable energy expenses prompted charities, activists and parliamentarians to send an open letter last month urging them to make good on their promise to introduce a subsidised “social” tariff for low-income families (see update below).
Tim Jarvis, managing director of markets at Ofgem, said: “We know that families across the country are dealing with wider issues related to the cost of living and rising energy, so any decision to push prices to the value limit is one we take lightly.
“However, the scale of bad debts and the potential threat of suppliers leaving the market or going bankrupt, which would pass on even higher prices to households, requires us to have all regulatory features available. “
Dame Clare Moriarty, chief executive of the charity Citizens Advice, said: “Even before winter arrives, we are helping more people than ever who are unable to pay their energy bills. Worryingly, more and more families are going into debt for energy in most cases. popular months, and some had to borrow money to check and keep the lights on.
“High power values mean that millions of people are at risk of falling in the coming months. An increase in the ceiling on securities to pay off higher debts will make spending even more unaffordable. Any adjustment will have to be in the most productive interest. of all consumers.
“For now, the government wants to continue supplying those most at risk this winter. “
Energy UK, which represents suppliers, has also published the Voluntary Debt Pledge for Winter 2023, developed with Citizens Advice and Ofgem. It outlines the steps 14 committed suppliers will take to supply, such as:
The corporations involved are British Gas, E, Ecotricity, EDF Energy, E. ON Next, Good Energy, Octopus, Ovo, Rebel Energy, Shell Energy Retail Limited, Scottish Power, So Energy, Utilita and Utility Warehouse.
With the energy market price cap set to be updated on Sunday, an open letter signed by 140 charities, activists and parliamentarians urges the government to deliver on its commitment to low-income families in the face of volatile energy prices by introducing a social tariff, writes Candiece Cyrus. .
The limit limits the amount suppliers can qualify families per unit of fuel and electric power, as well as related ongoing costs. Set quarterly, it will increase from £2,074 to £1,834 per year for a typical client family from October 1 (see story below).
The new threshold level, which is based on Ofgem’s revised usage decline figures from October, and would be £1,923 a year for a typical household, based on its previous figures, is still the maximum in old terms. As recently as March 2022, the limit is less than £1,300.
Anti-poverty organisation National Energy Action, Age UK and Citizens Advice are among those calling on the government to help Americans “whose expenses are so unaffordable that they have to make a desperate choice that no one deserves to have to make: between heating and eating”.
The letter is signed by Independent MP Angus MacNeil, chair of the Energy Security and Net Zero Committee, and MP Ben Lake of Plaid Cymru, chair of the all-party parliamentary organisation on energy poverty and energy efficiency.
MacNeil also criticized utilities for holding what he considers an excessive amount of their customers’ cash in the form of loans in their accounts. A BBC study found that companies held £8 billion of their customers’ cash in the first quarter. of the year.
As for the social tariff, the government pledged in the autumn of last year to “expand a new technique to cover customers in energy markets, which will be implemented from April 2024” and to “work with customer teams and industry to reflect on the most productive technique”. “. , adding functionalities such as social tariffs.
A social tariff has been put in place to make it easier for those struggling to pay their bills. Water, broadband and telephone companies already offer this type of tariff, but none have yet been implemented for energy customers.
To qualify, a user wants to get secure, means-tested benefits, such as Universal Credit or Pension Credit, or have a chronic illness that requires above-average energy consumption.
The campaigning organisation says UK families who are affected by their energy costs now owe £2. 25 billion, an increase of more than 70% in the last three years.
The energy price cap, which determines how much suppliers can qualify families per unit of fuel and electric power and related ongoing costs, will be lowered for a consecutive quarter on Sunday, Oct. 1, writes Candiece Cyrus.
The cap, set every three months by market regulator Ofgem to reflect changes in wholesale energy prices, will stand at £1,834 a year until December 31, up from £2,074 a year in the three months to October.
It is based on the typical electricity consumption of a dual-tariff family, paid by direct debit, according to Ofgem’s revised average consumption decrease figures, which the regulator will refer to from next month. It would be £1,923 a year for a typical family. Ofgem is also reducing the value limits that apply to energy consumers who pay through other methods.
The limit does not restrict the amount of a household’s bill, which is determined through the amount of energy it consumes. Invoices also vary depending on the customer’s location, reflecting the sourcing charge in a specific region.
Campaigners have expressed fears that the cap relief itself will be accompanied by relief in the constant fees that are added to all bills. The value of fuel is rising from a penny to an average of 30 pence per day.
Since those rates are constant and universally applied, they gain advantages by reducing consumption.
According to Ofgem, the price cap update will bring the average dual fuel bill below £2000 for the first time since April 2022. At the time, it cost £1971 a year. The regulator says the cap, at its current level, will save families an average of £151 compared to last quarter.
However, this winter there will be no government to adjust the £400 paid in instalments to all families between October 2022 and March 2023, when spending was limited to £2,500. This means that consumers will derive little benefit from cap relief.
Ofgem’s revised average energy consumption figures, which will come into effect on 1 October, take into account a relief in average household energy consumption as a result of others using less energy to save money, as well as the long-term effect of higher power from appliances and greater insulation from the building.
The regulator found that the average household now consumes 2,700 kWh of electricity and 11,500 kWh of fuel per year, up to 2,900 kWh and 12,000 kWh respectively.
Based on the new figures, analyst Cornwall Insight predicts that the cap will fall to around £1,898 per year in January next year before falling back to around £1,820 in April. It predicts that the cap will fall further to £1,781 in July before emerging to around £1,825 in the final quarter of the year.
However, if existing average energy consumption figures were to hold, the cap would rise by 3. 5% to £1996 per year in January 2024, before falling to £1912 in April and £1872 in July before rising again to £1922 per year in 2024. . October.
As wholesale energy costs fell and stabilized, suppliers began offering steady deals again. These tariffs, which guarantee energy consumers a constant rate consistent with the unit of energy, for 12 months, have been largely absent from the flexible market for more than a year due to elevated and volatile costs.
While fixed rates protect families from price increases over time, families could end up paying more than the cap if prices fall. The deals come with “exit penalties” designed to discourage consumers from leaving early. These can charge £75 or more for fuel.
The table below shows some of the consistent rates that can be obtained lately from primary providers.
E. on Next proposes a tariff that follows the energy price cap. The E. on Next Pledge fee will still be around £50 below the cap, meaning it will be around £1,870 from October. The price will be updated every three months to reflect changes in the energy value limit.
Customers will need to pay £25 for fuel to make the transaction more than 42 days before the end of the term (all constant fees will need to offer this amount and forfeit the fee as the end of the term approaches). . The fee will apply to existing consumers who pay by direct debit.
A cross-party committee of MPs has called on the government, electricity regulator Ofgem and suppliers to do more for families this winter, writes Candiece Cyrus.
The Energy Security Committee and Net Net’s Winterisation Report suggests measures that the government, Ofgem and suppliers can take for families in time for the colder months ahead.
According to the Committee, 6. 6 million families are in energy poverty, meaning they have to spend 10% or more of their source of income on energy, up from 4. 5 million in 2021.
The report recommends that the government extend the Warm Home Discount scheme, which offers low-income families and those facing or at risk of energy poverty a payment of £150 during the winter.
Since 2021, energy consumers can only get benefits from the program if they get safe perks, tax credits, or pension credits and if they live in an asset with a maximum energy load score, as determined by the rating agency. agency.
The committee suggests expanding the plan to other people with disabilities, seniors, people with chronic illnesses and people with low incomes who would otherwise not be eligible.
It also calls on the government to ensure that families who last winter did not get advantages from government energy bill bills totalling £400 because they didn’t get vouchers, for example, get their bills promptly.
Other measures include speeding up the implementation of smart meters and reviewing the payment scheme for current tariffs that will be based on the amount of energy consumed by a household. Currently, the charge, which covers the charge of a provider supplying power to a property, among other operating charges, is set as a tariff.
Smart meters allow families to monitor the energy they use and identify spaces where consumption can be reduced. Meters also provide real-time insights to providers, for more accurate billing.
The report also suggests that the government work with suppliers to create a “social” tariff to help others in energy poverty, and that Ofgem and energy suppliers adopt a more proactive approach to improving industry standards.
This would involve providing a priority telephone line for customer organisations and charities to provide assistance on behalf of their customers.
Ofgem also deserves to require all customers, especially those in energy poverty, to obtain continuity from their supplier. This includes recommendations on where they are eligible for MonetaryArray.
Angus MP Brendan MacNeil, chairman of the Energy Security and Net Zero Committee, said: “The nights are coming and many of our highs will be haunted by heart-wrenching memories of the relentless sacrifices they were forced to make last year. simply to stay afloat in the face of sky-high energy costs.
“While monetary aid will be important, it will also require a drastic improvement in visitor service and the empathy that electric corporations show towards those going through difficult times. If those companies don’t improve, Ofgem wants to be less and give them a great spice to make sure they work to benefit the most productive interests of their consumers this winter.
On the other hand, Prime Minister Rishi Sunak abolished his Energy Efficiency Task Force six months after its creation.
The 15-member group’s aim is to reduce the UK’s overall energy demand by 15% from 2021 to 2030, through national real estate and advertising processes. Their work included accelerating the installation of insulation in less energy-efficient homes and retrofitting. boilers.
Sunak’s resolution builds on an announcement last week showing the postponement of the phase-out of fuel boilers and the postponement of the ban on the sale of new petrol and diesel cars from 2030 to 2035.
Energy consumers with lower municipal tax brackets who live in less energy-efficient homes can now apply for government help insulating their homes and save money on their energy bills, writes Candiece Cyrus.
Previously, these plans were only available to those who had certain state benefits, but to be eligible for the Great British Isolation Plan, families only need:
According to the government, 47% of UK families had a grade D certificate or lower in 2022.
Applications can be submitted at gov. uk. The procedure consists of answering questions about the type of house and the newly existing insulation, as well as the main points of the CPE and family income.
This figure will be used if the family will be asked to make a contribution to the project expenses. The procedure asks whether the family’s source of income is above or below £31,000 per year, implying that those with source of income above this point will possibly be required to pay up to 10% of the charge.
Anyone who has an EPC will get one from their energy supplier, who will commission a licensed installer to assess the assets and propose the most appropriate course of action.
Unlike other “whole-home” energy enhancement initiatives, the Great British Insulation Plan only provides for one type of insulation improvement, such as attic insulation or hollow space wall insulation, but both.
Work can only continue if the owner complies with the proposal and meets the monetary contribution requirements.
The government says the 300,000 families eligible for the scheme could save up to £400 a year on their energy bills.
The program will run in conjunction with the Energy Company Obligation (ECO) program, which provides free home power upgrades, adding heat pumps, solar panels, and insulation, to low-income families.
The government has also introduced an online eligibility checker for the home renovation grant. The subsidy helps homes that are not connected to the fuel grid to control their electrical power if they have an electrical functionality certificate from D to G. According to the government, 25,000 homes are eligible.
Providers will no longer be required to forcibly install prepaid meters in the homes of those over the age of 75 living without assistance or with children under the age of two to cover their energy expenses, writes Candiece Cyrus.
Lately, the no-install rule only applies to energy consumers 85 and older and those with serious medical conditions, in addition to consumers with a terminal illness or illness that requires a warm home.
The extended rules, announced through regulator Ofgem, will come into force on November 8 and expand the scope of the voluntary code of practice introduced in April, which all energy suppliers have agreed to abide by.
The Code also requires providers to attempt to touch a visitor at least 10 times before installing a prepaid meter. Suppliers will also need to refrain from installing such meters in the homes of those who want a constant source of energy due to their health. and those who are unable to recharge their meter due to intellectual or physical disability.
Vendor representatives stop at a scale point to check for vulnerabilities before deciding to install a prepaid meter, and use an audio device or camera to monitor the procedure of any vulnerability check or installation of a prepaid meter.
If a meter is installed, the supplier will need to obtain £30 credits to lessen the threat of a visitor wasting the fountain due to a lack of means to refuel. Vendors will also have to re-evaluate records once the visitor has paid off the debt. Should.
There are currently no suppliers that wear out unintentional installations. During the 56-day implementation period through Nov. 8, providers will have to identify where they have incorrectly installed unintentional prepaid meters and offer affected consumers a refund and a non-prepaid payment method, before they can restart installations of unintentional prepaid meters.
They will also need to provide Ofgem with knowledge about their unintended installations.
Code Ofgem’s reaction to reports that suppliers such as British Gas were illegally installing forced prepaid meters in the homes of “vulnerable” customers, including the elderly, who were struggling to pay their electricity bills.
From 8 November, if suppliers break the rules, they will face “severe penalties”, although Ofgem has not revealed what it is.
Neil Kenward, Chief Strategy Officer at Ofgem, said: “Prepaid meters are a vital payment approach that is helping millions of families manage their energy bills, but they are not for everyone.
“Today’s strengthened regulations aim to ensure safe coverage against malpractice, while ensuring that, where necessary and as a last resort, providers use unintended services and responsibly. “
Louise Rubin, policy director at disability charity Scope, said: “The newly defined regulations are a welcome improvement, but they don’t go far enough. There is no guarantee that a family with a disability will not face a forced installation of MPC this winter.
“We are disappointed that Ofgem has not approved additional measures and banned forced meter installation and remote switching for all other persons with disabilities. “
Compensation for families and businesses losing steam due to extreme weather events has nearly tripled, Cyrus writes.
The maximum energy rebate consumers can get in the event of severe storms will be £2,000, up from £700, under new regulations put in place through Ofgem, the energy regulator.
It follows his review of how distribution formula operators responded to storm Arwen which, in November 2021, affected around 40,000 electricity consumers in Britain for three days and almost 4,000 people for more than a week.
Six major grid operators, plus UK Power Networks and National Grid Electricity Distribution, are responsible for connecting homes and businesses to the electricity grid.
Ofgem’s adjustments also lead to an increase in advance bills from £70 to £80. These adjustments should be made if strength cannot be restored after 24 hours for a Category 1 storm, or after 48 hours for a Category 2 storm. Previously, until now, advance banknotes were only activated if strength was not restored after 48 hours, regardless of the type of storm.
The typhoon category for these purposes is explained by its effect on the energy grid.
The adjustments made through Ofgem also include reducing the waiting time for consumers to get an additional refund from 12 to six hours, payment of the refund via bank transfer, and a new mechanism that will adjust bills to inflation.
Ofgem says the adjustments mean more consumers will be entitled to higher payment levels if they are left without power for long periods of time. Network operators who breach those regulations can face fines of millions of pounds.
Akshay Kaul, Ofgem’s director of infrastructure, said: “It is unacceptable that thousands of homes are left without power in freezing situations for an extended period during Storm Arwen, with poor data on when their power would be restored.
“Many have also struggled to get the reimbursement they were entitled to afterwards, and that’s why new and stricter rules have been put in place. “
Kaul added that while “lessons have been learned,” the frequency of extreme weather events will only increase and the grid will need to be resilient.
Octopus Energy has agreed to take over Shell’s domestic power in the UK and Germany.
The move will add 1. 4 million households to Octopus’ books, expanding its success to approximately 6. 5 million households in the UK. The agreement also includes the adoption of 500,000 broadband customers.
Following regulatory approval, the move is expected to be finalized by the end of this year, at which point Shell will communicate with its consumers to learn about the next steps.
Octopus said that “there will be a smooth transition and there will be no disruptions in customers’ power supply. “He added that “customers’ credit balances will be transferred and automatically transferred to their new account. “
The deal will make Octopus the UK’s second-largest energy supplier, British Gas, the Centrica-owned company with around 7. 4 million domestic customers.
The energy price cap, set quarterly by regulator Ofgem, will rise from £2,074 a year for a typical customer household paying by direct debit to £1,923 from 1 October.
For families with a prepaid meter, the limit will be £1,949, up from £2,077. The average bill for those paying by other means, such as cheque or cash, will rise from £2,211 to £2,052.
This is the first time since September last year that the main limit will be below £2000. In March 2022, it stood at £1277, meaning it will still be almost 50% higher than it was 18 months ago.
The limit limits the amount energy providers can qualify for each unit of fuel and electric power, as well as related ongoing costs. This is not a limit to actual bills, which are decided based on the amount of energy consumed.
Ofgem sets the cap in reference to wholesale energy prices, which have fallen in recent months as the market has adapted to the situation resulting from Russia’s invasion of Ukraine. However, market analyst Cornwall Insight warned that the cap could only be reached in January if the risk of a strike at liquefied natural fuel facilities in Australia continues and disrupts agreements with foreign sources.
A number of power companies began offering fixed-rate, fixed-term energy price lists as prices fell. These price lists were virtually absent from the open market over the past year due to price volatility.
The energy solution promises you a guaranteed rate consistent with the unit of energy, regularly for 12 months and regularly at a price close to the existing maximum value. This protects you if prices go down, but you risk being left in a costly deal if prices go through. down.
Although costs are expected to rise again in early 2024, they are expected to come down in the second and third quarters of the year. But this will depend on the maintenance of economic and geopolitical stability, as well as the severity of the coming winter, which it will demand.
Customers who are debating whether or not to fix will have to weigh those uncertainties against the benefits of pricing and budget certainty for the duration of the solution. Anyone who wishes to end a fixed-rate agreement during the term will usually face a penalty for leaving. It is normally set at £30 depending on the fuel or more.
The persistently high price of the domestic energy source is likely to renew calls for the arrival of a social tariff to reduce the expenses of other people in a situation of energy poverty, i. e. a disproportionate percentage of household income is absorbed through energy costs.
Energy corporations and Ofgem, as well as charities and anti-poverty activists, have subsidised the arrival of such a tariff, but the government has refused to give the green light to such a proposal, which would require investment from other taxpayers or public funds.
From October, Ofgem presents new figures that include its estimate of the average household consumption. This will reflect that families consume less energy at the checkout to save money and benefit from increased appliance efficiency.
Currently, the typical annual consumption is 12,000 kWh of fuel and 2,900 kWh of electricity. Here are the figures used for today’s limit announcement.
From October, Ofgem will use reduced figures, namely 11,500 kWh for fuel and 2,700 kWh for electricity, which will be at the limit valid from 1 January to 31 March 2024 for the first time.
Market analyst Cornwall Insight has published its estimates of long-term energy price caps, set quarterly by Ofgem, the regulator.
The cap, which reflects wholesale energy prices, limits the amount electric corporations can qualify per unit of fuel and electric power used, as well as related prevailing prices; It’s not a limit to actual bills.
The existing cap, which came into effect on July 1, is £2,074 per year for an average consumer household with a dual fuel tariff paid via direct debit.
This is a sharp drop from previous versions of the cap and its transitory replacement, the government’s energy value guarantee and the cut cited by the Office for National Statistics last Wednesday as an explanation for the sharp drop in inflation in July to 6. 8% (from 7. 9% in June).
Average consumption is explained as the annual consumption of 12,000 kWh of fuel and 2,900 kWh of electrical energy. However, from October, Ofgem will use lower figures to reflect that average household consumption has decreased thanks to a combination of energy savings. made through consumers who seek to reduce their expenses and innovations in the power of many family appliances.
The new figures will be 11,500 kWh for fuel and 2,700 kWh for electricity. To constitute this change, Cornwall has published two sets of figures showing the basis of the calculation.
Using existing intake figures, the October limit is estimated at £1,926. With the drop in intake averages in play, Cornwall says it will be £1,824. Ofgem will verify this figure on August 25.
It should be noted that the new calculation basis does not in itself imply a reduction in energy prices: it reflects assumptions about the amount of energy a typical household consumes.
In the long term, Cornwall says the January 2024 cap will rise particularly (£2,083 on the old basis, £1,980 on the new basis), largely due to the risk of a strike at liquefied vegetable fuel facilities in Australia. which could lead to an increase in wholesale prices.
For the second quarter of 2024, the figures are £2,015/£1,915 and for the third quarter they are £1,965/£1,867. It is sometimes accepted that forecasts are less reliable the more future they are, precisely because of geopolitical reasons and economic uncertainties and the effect of weather conditions on demand.
Commenting on the new estimates, Craig Lowrey of Cornwall Insight said: “While a slight reduction in October spending is welcome, we are again seeing energy price forecasts well above pre-crisis levels, highlighting the limitations of price caps as a tool. “families with their energy expenses.
“As many have acknowledged, it’s about the government exploring alternative solutions, such as social tariffs, to ensure stability and affordability for consumers. “
Energy market analyst Cornwall Insight predicts that Ofgem’s value limit will fall more than expected when it is revised in October, writes Candiece Cyrus.
The limit is adjusted quarterly to reflect adjustments in wholesale prices. In early July, Cornwall said the cap, which is currently £2,074 a year for households with typical consumption, would fall to £1,878 by the fourth quarter. Now he says he will succeed at £1,861.
However, the analyst revised up his estimate for the first quarter of the year, from £1,917 to £1,959. Similarly, the estimate for April-June 2024 has increased from £1,888 to £1,917.
Cornwall has also published its first estimate for the third quarter of next year, which shows a drop to £1,870, down more than £200 from currently.
Regulator Ofgem has drawn up a list of proposals to supply power to families and businesses, writes Candiece Cyrus.
This includes extended opening hours for families and increased complaint control for business customers.
Ofgem said its proposals would “set expectations” for all consumers to get a “consistent and appropriate point of service, regardless of which company they work with. “
For households, it offers power companies:
For companies, the regulator reviews the demanding situations that arise in the market. Next:
The regulator also set the level of capital that energy suppliers will have to maintain in order to cope with market shocks after 30 corporations went bankrupt in reaction to emerging wholesale costs in 2021/22.
Ofgem is also proposing to give it the power to order suppliers to reserve a portion of their customers’ credit balances if it is in the consumer’s interest to do so.
A statutory consultation on national customer criteria will close on 23 August 2023. A resolution on the criteria for domestic customers is expected to be reached in early October.
Ofgem proposes to have many of these requirements available until December 2023 to help protect and assist consumers through the winter.
The proposals for the non-national review will undergo legal consultation in autumn 2023 and any licence modifications are expected to be implemented in the winter of 2023/24.
Regulator Ofgem is warning families to think before switching to a flat rate after such offers have returned in recent weeks since the revised price cap came into force on July 1, writes Candiece Cyrus.
His message coincides with analyst Cornwall Insight’s knowledge that switching to one of the new flat rates will save on energy costs over the next 12 months.
Suppliers have introduced price lists close to the annual limit of £2,074 for typical customer families (see update below) following the fall in wholesale energy prices.
Ofgem tweeted today: “Fixed energy price lists have returned to the market, but check if they are right for you. Prices are still unpredictable and signing up for a consistent rate now can mean missing out if costs drop in the future.
Fixed-value lists allow energy consumers to benefit from a constant value per unit of power, for 12 or 24 months. This can make it easier for them to manage their finances than those with a popular variable rate (SVR). .
Ofgem’s limit limits the amount suppliers can rate consumers according to the unit of energy and the rates in effect on an SVR tariff, with updates based on the fluctuation of wholesale costs made quarterly. There is no limit to the expenses themselves, which reflect the amount of energy consumed.
Most families are reaping benefits from SVR price lists after suppliers removed their constant price lists from the market as wholesale energy costs began to skyrocket due to Russia’s invasion of Ukraine.
Households with constant price lists would likely pay less than SVR consumers if wholesale costs increased contract length, or pay more if they decreased.
Cornwall Insight says those who signed up for the cheapest consistent offer available earlier this month (Utility Warehouse’s Fixed Saver, valued at £1,974 a year for typical use) will likely pay the same value as an SVR visitor over the next 12 months.
The analyst’s calculations are based on the existing cut-off point (£2,074) and his most recent guidance for the next 3 quarters, which is:
James Mabey, an analyst at Cornwall Insight, said: “The return of electricity supply has captured the country’s attention in recent months as many families seek lower and stronger energy contracts.
“Based on our current forecasts, consumers will lose out if they sign a consistent one-year contract. However, those contracts will generate no or no significant savings.
“While monetary gains from the adoption of national constant price lists are limited lately, they provide a sense of security for consumers in the context of recent volatility in the energy market. Households’ preference for solid costs may simply increase the number of other people who subscribe to consistent offers.
Energy EDF offers new and existing consumers a 12-month flat rate on fuel and electricity set at £2,100 for an average family with typical energy consumption, writes Candiece Cyrus.
This compares to the energy regulator Ofgem’s energy value limit for default variable rate tariffs, which stands at £2,074 per year for the average family with typical energy consumption.
Actual bills, regardless of tariff, are determined by the amount of energy consumed.
The exclusive EDF Jul24 Essentials offer is available to families who want to have one installed when they sign up for the tariff. A dual energy (gas and electricity) payment of £150 is charged if a visitor leaves the Early Rate.
Exit fees are charged up to 42 days before the end of a transaction’s term.
EDF’s be offer is in addition to a limited number of constant 12-month be offers that have been on the market lately:
The new deal with EDF shows signs that the energy market could stabilize after Russia’s invasion of Ukraine and upcoming sanctions on its energy exports, which caused wholesale costs to soar globally.
As a result, vendors have withdrawn their consistent offerings from the market. Now, most of the offerings on the market are still available only to existing customers of suppliers.
Most consumers now benefit from popular sliding rate rates. The energy value limit dictates the maximum amount suppliers can rate their customers per unit of energy on this type of tariff, based on wholesale prices. This limit is updated quarterly.
On July 1, it rose from £3,280 to £2,074 a year for a typical household, but energy consumers still face expenses above old levels. Ofgem’s limit was around £1300 in March 2022 and was still below £2000 the following September.
Fixed price lists oblige energy consumers to an agreement for a consistent period of time: 12 or 24 months. They can be especially helpful for families who need to budget with certainty.
However, if wholesale prices fall over the life of the transaction, consumers with a constant rate will likely find themselves paying more per unit of power than those with a popular rate.
Neither the limit nor the constant restrict a household’s bills, which are decided through the amount of energy it uses. Only the unit rate and related constant prices are capped.
The latest predictions from analyst Cornwall Insight suggest that the Ofgem limit will be updated as follows, for an average family per year:
However, wholesale costs are threatened by geopolitical upheavals, such as a new standoff in Ukraine, which explains the increased interest in fixed-rate offers.
Elon Musk, owner of electric vehicle manufacturer Tesla, is reportedly set to launch a renewables-focused electricity company, Tesla Electric, in the UK, writes Candiece Cyrus.
Evidence of this resolution is a task post for an operations manager in London on the business-oriented social media platform LinkedIn.
Currently, the company operates in Texas and is aimed at “accelerating the transition to sustainable energy. “
Its main tool for achieving this is its home electric battery product, Powerwall, which allows families with solar panels to sell their excess electrical power back to the grid when wholesale costs are high.
This generates credits that are added to the home energy bill, saving them cash on bills in the long run. The precise main points of how the service will work in the UK are yet to be revealed.
However, UK energy suppliers participating in the government’s Smart Export Guarantee (SEG) scheme allow their consumers to sell their electricity back to the grid. Households are subject to a SEG tariff and are paid for the unit of energy they return. A SEG supplier may be another company that supplies the energy to the home.
The amount a family can earn will depend on several factors, adding up their location, their express rate, and the location of their solar panels.
According to Energy Saving’s Trust Solar Energy calculator, a family in London can save £298 a year on their expenses thanks to solar energy.
The Powerwall also offers solar power that can be used in power outages or when the sun rarely shines much, and provides “intuitive” vehicle charging. This includes detecting when power is needed indoors or when there’s a power outage and deceleration, or preventing a car from charging accordingly.
Tesla’s website claims that Powerwall also charges an electric vehicle with excess solar power if plugged in while the sun is shining. The accompanying app allows users to distribute force between their assets and their vehicle. A Powerwall unit costs around £8,900.
Tesla Electric’s expansion comes as the U. K. aims to ban the sale of new internal combustion engine cars until 2030 and the prestige of net-zero carbon emissions until 2050.
In its project post, Tesla Electric states, “Tesla Electric is Tesla’s electric power retail offering, currently available to Tesla product owners in select global markets, such as Texas.
“Providing a seamless and undeniable experience for visitors will ensure that small-scale residential flexibility can be fully applied to the transition of the entire electricity grid to 100 per cent renewables.
Households and businesses with smart meters in England, Scotland and Wales could once again benefit from discounts on their electricity costs by using fewer peak power hours this winter, writes Candiece Cyrus.
This opportunity will be presented to consumers of suppliers who provide the flexibility call service when there is a risk of energy demand due to oversupply. Participants will be required to use smart meters that can send readings to providers every 30 minutes.
Customers who don’t have a committed supplier can simply turn to an independent company to extract the necessary data from their meter application.
We will update this page with corporations this winter once the data is available.
According to National Grid ESO, which monitored the service between November 2022 and March 2023, around 1. 6 million homes participated, reducing electricity consumption by 3,300 megawatt hours during 22 peak periods.
Participating families were contacted through their suppliers prior to peak periods of energy demand (usually late afternoon or early evening Monday through Friday) so they could monitor their electricity consumption.
The grid said families can save between £3 and £6 per kilowatt-hour of unused energy during the peak of the year, although the exact amount is decided through each provider.
Ask about the extreme situations for this winter.
According to a survey of approximately 24,000 participants, 62% were satisfied with their experience and 83% would participate again. The majority of respondents (85%) found out about the service through their provider (multiple responses were allowed).
When asked about their most sensible motivations for participating, 76% of respondents said it was the monetary benefit, 41% discussed the challenge, and 37% said their motivation was balancing the grid or “keeping the lights on. “
When asked about the main benefits of participating, 42% cited the satisfaction of effectively completing the challenge, 39% said they earned rewards, and 38% said it was part of a national collective effort.
However, some demographics were underrepresented, such as younger age groups, low-income households, renters, and city residents. The network said participation would be monitored to identify inequalities in access to offerings through the service and differences in participation outcomes.
National Grid ESO introduced the abatement service as a solution to the need for forced power cuts if the force requires an excess supply, due to Russia’s invasion of Ukraine.
The resulting sanctions on Russian fuel exports have threatened Europe’s fuel supply. The grid operator said there were “ongoing dangers and uncertainties similar to Russia’s invasion of Ukraine” this winter.
Through its regulator, Ofgem, energy corporations are being warned to preserve their profits before paying dividends to shareholders so that they remain financially resilient in a volatile market, writes Candiece Cyrus.
Financial instability contributed to the closure of 30 suppliers in 2021/22, when wholesale energy rates began to skyrocket. The charge of moving consumers to other providers will be covered by deductions from consumers’ bills.
The taxpayer also took responsibility for supporting Bulb, which he considered too big to fail, before selling it to Octopus last December.
Ofgem sees monetary rigor in the control of power corporations as wholesale costs fall and profitability returns to the market after five years of losses.
The regulator said it expects corporations to “act responsibly and in the interests of their customers. “
The government also wants households to benefit from lower wholesale prices, which is reflected in the latest update to Ofgem’s energy value limit. On Saturday, it increased from £3280 a year for an average family to £2074 a year (see story below).
However, the effective relief is £2,500 per year, with the cap temporarily replaced by the government’s energy value guarantee.
Analyst Cornwall Insight has issued guidance on the price cap for the fourth quarter of 2023 and the first part of 2024. It says the cap will increase from £2,074 to £1,878 on October 1 before emerging to £1,917 on January 1, 2024. The estimate of 1 April 2024 costs £1,888. The limits from October 2023 are based on a relief in the annual average consumption figures released via Ofgem last week (see story below). As always, the actual expenses are not limited and will be decided based on the volumes of energy consumed.
Due to declining energy prices, industry analysts expect suppliers to start offering competitive energy deals in the coming weeks and months.
In a letter to suppliers this morning, Jonathan Brearley, chief executive of Ofgem, also said the regulator would continue to review and update the value limit. It’s also considering a borderline option that would appeal to larger consumers in volatile market conditions.
Permanent measures are planned to ensure that families with prepaid plans do not pay more than consumers by direct debit. Prepaid consumers historically pay more, due to the higher administrative costs required to offer this payment method.
However, since July 1, the government has stepped in to cover the price difference for consumers of prepaid and direct debit meters, although this is only expected to last until April 2024.
The regulator is also:
Vulnerable customers include seniors, other people with disabilities, and young children. The regulator introduced a voluntary code of practice in April, which all suppliers signed up. This follows reports that British Gas breached Ofgem regulations and forcibly installed meters in the homes of vulnerable customers. Last week, Ofgem announced a legal consultation to make the code of practice mandatory.
Brearley said: “An energy sector where companies can make moderate profits is vital to creating a sustainable and competitive market for consumers. However, returning to the practices we saw before the energy crisis is not on the agenda: suppliers will have the sector gain from consumers and taxpayers when wholesale costs rose, behaving responsibly in the face of falling costs and supporting profits.
“The energy market has changed. Ofgem has made fundamental adjustments to the market and we want suppliers to be informed about the energy crisis and play their part in ensuring they are financially sound, able to absorb potential losses and meet our new capital requirements. I don’t expect to pay dividends again until a supplier has met those capital requirements.
“We will monitor the situation closely, adding that the market operates competitively in terms of price, visitor service and cutting-edge products, and that suppliers meet their obligations to the maximum of the vulnerable. “
Today we are witnessing the long-awaited removal of the energy price cap, which governs how much consumers can be charged per unit of energy they use, as well as the corresponding constant tariffs.
Set by market regulator Ofgem, the cap is now £2,074. This is the amount a family would pay per year if they were fueled by an average amount of fuel and electricity and paid their overdue expenses by monthly direct debit.
The cap does not restrict the number of bills, which are decided through actual consumption. The cap point is used as an indicator of the prices that a typical household is likely to bear.
The price cap is reviewed quarterly to reflect changes in wholesale energy prices. The previous cap, which came into effect on April 1, was £3280.
However, since October last year, the cap has been replaced through the government’s Energy Price Guarantee, which has calculated the typical annual bill at £2,500. The guarantee came when it became apparent that rising wholesale costs would push the limit beyond £3,500.
From today, the cap is back in effect, resulting in relief in the government guarantee of £426 per year. The guarantee will come into play if the limit exceeds £3,000. Analysts expect the cap to fall below £2,000 when it comes into effect. The next review will be on October 1.
Separate limits apply to those who pay late by check or cash and those with prepaid meters.
For check and cash customers, the limit has been increased from £3,482 to £2,211 for typical dual-fuel consumption. The additional prices reflect the higher prices incurred through electric corporations to manage those payment methods.
For prepaid consumers, the limit has been raised from £3,325 to £2,077 for typical dual-fuel consumption, bringing it closer to the point of the main limit. The government has insisted that the premium in the past was paid through prepaid consumers – again, at Administrative Canopy Prices: We’ll get rid of the existing peak.
Many prepaid consumers are financially vulnerable.
Ofgem defines the average annual household consumption as 2,900 kWh of electricity and 12,000 kWh of gas. Starting in October, those figures will be set at 2,700 kWh of electric power and 11,500 kWh of gas, reflecting the degrees of consumption as economically struggling families adopt and locate tactics. to be more energy efficient.
This replacement will replace the figure shown for the cap, but, as noted, it doesn’t necessarily mean that expenses will fall at the same rate. Households will continue to be charged for the energy consumed, albeit at lower unit rates and constant rates.
From 1 July, the unit point of the value limit, down to one cent, for an average visitor paying by direct debit, will be 30 pence per kWh for electricity consumers and a constant rate of 53 pence per day.
The constant unit for a typical gas visitor is 8 pence per kWh with a constant rate of 29 pence per day.
Analyst Cornwall Insight estimates that, based on new average intake figures for October, the cap will fall to £1,871 consistent with the year for a dual-energy family with typical intake when it reboots. That’s £107 less than their previous forecast of £1,978.
It also expects the cap to be around £1,901 a year for a typical family in January 2024, cutting its previous forecast of £2,004 a year to £103, due to relief in the average income figure.
Analyst Cornwall Insight says the energy price cap, set by regulator Ofgem to control household spending, will fall below the first point forecast in October this year and January 2024, writes Candiece Cyrus.
The revision is the result of adjustments made through Ofgem to the way it calculates typical energy consumption. He states that families are consuming less fuel and electricity due to high costs and greater energy efficiency, so consumption figures will be reduced accordingly.
The limit refers to the annual bill that an average family can expect to pay. Previously, it was calculated on the basis of a consumption of 2,900 kWh of electricity and 12,000 kWh of gas. These figures have been revised down to 2,700 kWh and 11,500 kilowatts.
However, this does mean that the expenses themselves will change. Ofgem has not made any adjustments to the unit rate for fuel or electricity, nor to constant rates, so families will continue to pay for the energy they consume as has been the case lately.
From July 1, the cap will be £2,074, a figure lower than the £2,500 energy value guarantee imposed by the government since last October, when the cap exceeded £3,500.
Cornwall Insight predicts the limit will be reduced to £1,871 a year for a dual-powered fireplace, with typical energy consumption, when it restarts in October. That’s £107 less than their previous forecast of £1,978.
It expects the cap to rise to around £1,901 a year for a typical family in January 2024, shaving £103 off its previous forecast of £2,004 a year.
Dr Craig Lowrey, Senior Consultant at Cornwall Insight, said: “The drop in average value limit forecasts reflects Ofgem’s efforts to align with the energy consumption conversion patterns of typical households, as consumers respond to higher values, energy power measures, climate and other influences. by reducing your energy consumption.
“While typical family forecasts might provide some insight to consumers, families still face the challenge of spending well above old levels. This brings us back to the question of the goal of the cap, as doubts about the effectiveness of the cap in protecting consumers and their value fest have become a normal component of discussions about power.
Analyst Cornwall Insight predicts that the value cap governing annual household energy expenditures will fall to £1,933 for those with typical consumption in October before rising to £1,944 in January 2024. The cap will last below £2,000 in September 2022.
At present, the cap, calculated quarterly through regulator Ofgem, stands at £3,280, after touching £3,550 in October 2022 and peaking at £4,279 in January this year.
The immediate increase in the cap prompted the government to introduce its Energy Price Guarantee (EPG), which has capped the average household consumption bill at £2,500 a year since October 2022.
This guarantee will cease to apply from 1 July, when the Ofgem limit will increase from £3280 to £2074.
The cap falls due to a drop in wholesale prices, which in turn have declined as power corporations have turned to select resources sourced from those disrupted or “stifled” by the conflict in Ukraine and sanctions related to Russian fuel and oil.
Market watchers believe the reduced cap will prompt some suppliers to reintroduce fixed-price tariffs, which have been almost completely absent from the market for the past 18 months due to skyrocketing wholesale prices.
Fixed-energy contracts, usually for a constant period of 12 or 24 months, allow the supplier to purchase fuel at a guaranteed price for the duration of the term. They set the value per unit of fuel and electrical energy for the customer. , however, the actual expenses are determined through the amount of energy used.
The advantage of fixation is that the visitor enjoys increases in value while the patch is in place.
However, if the daily energy value drops, the visitor will be trapped in the constant value and will not be able to take advantage of it. Most fixed rates have an exit payment for those who want to leave the deal early; be as high as £75 consistent with fuel.
Ofgem has taken to social media to urge those on a flat fee to proceed with caution. Said:
“THINK BEFORE YOU FIX: Fixed energy price lists are back on the market, but check to see if they’re right for you. Prices are still unpredictable and signing up for a consistent rate now can mean missing out if costs drop in the future. .
The Small Business Federation says EDF joins the ranks of energy providers that will allow small business customers, stuck on very expensive constant tariffs, to adjust their contracts to save money.
The French company follows in the footsteps of British Gas, Engie and Drax by betting on the “Blend” program
The calculation will also take into account the current fall in energy costs, thus contributing to the overall cost.
Tina McKenzie, the Federation’s head of policy, commented on British Gas’ announcement last month of a 12-month tariff extension: “It’s important to allow small businesses to opt out of the energy contracts they put in place at the peak of the market last year. to their survival.
“British Gas is doing the right thing by embracing our call and giving small businesses the opportunity to ‘regroup and expand’. We expect this to be within reach of all small business consumers who have been stuck on fixed rates since last year’s peak. point. Now is the time for other providers to follow suit.
British Gas is also awarding grants worth £15 million to small businesses facing severe monetary pressures.
In a comment published in The Guardian, a spokesperson for the Federation said it would continue to monitor power companies: “This [Blend initiative]
Commercial energy contracts are entered into for almost a constant term and at a constant rate, with serious monetary consequences for corporations that need to terminate the contract early.
The government is urging families with classic prepaid meters to use their energy bill vouchers by the June 30 deadline, writes Candiece Cyrus.
Last October, the Energy Bill Support Scheme provided £400 in aid over the six months to March, paid in instalments of £66 and £67.
Those who used classic prepaid meters won vouchers by post or email that can be redeemed at the post or at the 28,000 UK retail outlets with PayPoint services, up to 90 days from the date of issue.
More than 83% of the £650 million vouchers have been claimed, but there is still £130 million to be redeemed until the end of June.
Charities and energy providers are collaborating with the government to inspire those who qualify for these bills to use their vouchers.
Adam Scorer, chief executive of anti-poverty charity National Energy Action, said: “Some consumers haven’t earned them, others have struggled to buy them back. “
Matthew Cole, director of the Fuel Bank Foundation, a charity that provides emergency fuel vouchers to prepaid meter consumers, said: “We have found that the reasons the vouchers have not been used are because other people did not receive them, due to major points or the user who has moved house and their records are not up to date, or you’ve lost or deleted the right type.
Lost, missing or expired vouchers can be reissued, as long as they are used before June 30, 2023. Anyone who has a classic prepaid meter and hasn’t earned their vouchers, doesn’t know how to redeem them, or wants to reissue one, can reissue them. She was told to contact her provider for help.
Ofwat, the water sector regulator, says 23% of payers are struggling to pay their water bills, compared to 20% of bill payers in October 2022 and 15% in March 2022.
He adds that only about 30% of consumers are aware that they can receive monetary help from water companies, while of those who said they “constantly struggled” with family bills, only 15% said they had gotten help from their water supplier. .
The number of bill payers who report that they have “never” struggled to pay a domestic bill fell from 45% in 2021 to 25%.
Ofwat urged water utilities to “continue to step up their efforts and consumers in monetary distress. “Information about water utilities can be found on the Ofwat website.
As widely predicted, the energy price cap set by Ofgem, the market regulator, will increase from £3280 to £2074 from 1 July. It will be the electricity charge for families in England, Wales and Scotland until the end of September. The cap will then go into effect from 1 October.
At present, national spending is governed through the Energy Price Guarantee, which was approved by the government last autumn when the Ofgem cap exceeded £3,500. This guarantee is £2,500, but will be replaced by the new limit.
The cutoff point is based on the average household’s typical usage of their provider’s default popular rate. It limits what suppliers can qualify for each unit of energy consumed, as well as constant costs, and doesn’t set the total amount of bills — families pay for the power they use.
From 1 July, the unit point of the value limit, down to the cent, for an average visitor paying by direct debit, will be 30 pence per kilowatt hour (kWh) for electricity consumers and a constant rate of 53 pence per kilowatt hour (kWh).
Analysts expect the October cap to fall below £2,000 before surpassing that figure in early 2024. However, the real target of the cap was decided through wholesale costs in the weeks leading up to its announcement, so there is no certainty about those costs. Predictions.
The cap relief in July will cause a drop in typical household spending compared to today; However, in March 2022, the energy value cap was just £1277 a year, and last year around this time it was still below £2000. , to £1,971. An upper limit of £2,000 is expensive in old terms.
As shown below, analyst Cornwall Insight expects household spending to return to pre-pandemic and pre-Ukraine war levels through the end of the decade.
The point of decline in the cap – which reflects the decline in wholesale energy costs – may simply lead to a resurgence of tariff changes, allowing families to seek less expensive deals. If this happens, competitive fixed-rate and fixed-term (12-month) contracts will only be noticeable from the end of June.
Before the closure of the electricity market in 2021/22, around six million households replaced their electricity tariff per year.
In July, consumers who prepay meters will also be charged the same unit rate for fuel and electricity as those who pay their arrears by direct debit. Currently, prepayment expenses are higher to cover management and service costs, but the government has ordered the forgiveness of this premium.
Energy market regulator Ofgem will unveil the latest edition of its price cap, covering the period from July to the end of September, on Thursday 25 May.
Cornwall Insight, the market analyst, predicts this will fall to £2,053 a year for a family with typical consumption levels, who pay back via direct debit, but the actual expenses are still the amount of energy used.
The current limit for typical use is £3280, but it is expected to come down thanks to falling wholesale energy prices, specifically natural gas.
At the moment, the cap has nothing to do with expenditure, as it is higher than the government’s separate guarantee of value, which limits average annual expenditures to £2,500. However, if the cap falls below the guarantee level, suppliers will have to set their prices at or below the maximum level, raising the prospect of lower expenses than recently from July.
It is also possible that suppliers will begin to compete for business due to declining wholesale prices. No replacement fees have been obtained on the open market for more than a year.
Cornwall Insight’s forecast for Ofgem’s October to December cap is that it will fall to £1,975 and then to £2,044 in the first quarter of 2024. The longer-term scenario remains unclear, as wholesale costs may skyrocket as a result of unforeseen external shocks. crisis. upheaval.
The analyst commented: “Despite the fall in the (July) cap on exorbitant values over the past two years, the figure remains above £1,000 a year above the value cap levels seen before the pandemic.
“Ultimately, we expect costs to return to pre-2020 levels by the end of the decade at the earliest.
“However, we expect to see the resurgence of more competitive constant energy price lists as costs begin to stabilize, offering consumers more features to manage their energy costs.
“Prices remain subject to volatility in the wholesale energy market, and our reliance on energy imports means that geopolitical incidents can still have a significant impact on energy prices. “
Good Energy and OVO Energy consumers who were overcharged £2. 7 million for the song will have to be reimbursed and compensated, Cyrus writes.
This follows an investigation by industry regulator Ofgem which found that between October 2022 and March 2023, nearly 11,000 OVO Energy consumers were overcharged for a total of just £1. 5 million.
They also found that between January 2019 and October 2022, just under 7,000 Good Energy customers were overcharged by almost £400,000.
OVO Energy consumers will receive a rebate and get a rebate totalling £181 each. Overburdened Good Energy consumers will get a rebate and rebate of an average amount of £109 each.
Customers have been overcharged against Ofgem’s energy value limit or the government’s energy value guarantee, which temporarily replaces the limit to keep prices more affordable. Suppliers must set their values at or below the maximum limit or guarantee level, whichever is in effect at the time. time.
Dan Norton, deputy director of retail at Ofgem, said: “Consumer coverage is our most sensible priority, and we expect providers to ensure that consumers pay no more than the value limit or guaranteed energy value, schemes set up in position to help others in the same matter.
“It is unacceptable that Good Energy and OVO Energy consumers have been overcharged, especially at such a challenging and stressful time for UK consumers.
Energy suppliers want to hear it loud and clear – we expect their suppliers to act with the utmost prudence and integrity. We will continue to hold you accountable if you fail to meet your consumer coverage or reporting obligations.
Good Energy and OVO Energy will also contribute £1. 25 million and £10,000 respectively to Ofgem’s reparation fund, which supports consumers in vulnerable situations.
Ofgem claims that OVO Energy’s contribution would have been significantly higher if it had informed the regulator of its overload issue and resolved it in time.
Good Energy has submitted an improvement plan, at the request of the regulator, to ensure that action is taken against overloads in the future.
The company, along with E. ON Next and Octopus Energy, were also fined through Ofgem for failing to submit a final bill or failing to compensate consumers who switched to another supplier. He ordered a total of £18,000 to be paid to 350 former customers (see update below).
Three energy suppliers have paid £8 million in fines for failing to compensate their former customers in time.
Providers are required to submit a final invoice to consumers who have switched providers within six weeks, as set forth in the Guaranteed Performance Standards (GSOP) regulations enacted in May 2020.
Those who fail to submit invoices within six weeks will have to pay £30 in a one-off refund to affected consumers. If invoices do not arrive within the additional 10 working days, consumers are entitled to an additional £30.
Energy regulator Ofgem has asked E. On Next to pay £5. 5 million to almost 95,000 consumers, Octopus Energy to pay £750,000 to 19,000 consumers and Good Energy to pay 350 consumers, for a combined total of £18,000.
Ofgem says that not getting a final invoice in a timely manner can lead to customer misconfiguration at the new supplier, debt to the old supplier, and a huge, unforeseen bill.
The watchdog found that the three suppliers had failed or unduly delayed payment of £6,305,925 in invoices owed to more than 100,000 customers.
This is the first time Ofgem has implemented GSOP rules. Neil Kenward from Ofgem said: “Ofgem has brought those criteria to bear so that consumers get the service they deserve when they switch energy suppliers.
“Our regulations mean that when electric corporations are delayed, consumers are compensated. We will not hesitate to hold the electric corporations to account, as we have done today.
“As the energy market begins to recover, we will most likely see a return to more change, and this action is a reminder to suppliers that they want change to be as simple and convenient as imaginable for their customers, and where they cause unwarranted harm. delays, pay the refund promptly.
Suppliers paid a further £1. 7 million in refunds to consumers or to the Energy Sector Voluntary Compensation Scheme (EIVRS), which supports vulnerable consumers. This amount included £1. 3 million from E. On Next in popularity of the formula and delays in payments.
Ofgem says all three providers have now updated their billing processes and systems to ensure invoices are now made in accordance with regulations.
Citizens Advice warns that most homes will require some point of improvement in energy power, costing an average of £15,000, if the UK is to achieve the prestige of having net-zero carbon emissions by 2050, writes Candiece Cyrus.
He says most families who aren’t eligible for government support, such as the Boiler Upgrade Plan, face monetary barriers to making changes.
Applicants for the program will need to be eligible asset owners with an Energy Performance Certificate (EPC) with no notable recommendations for attic wall insulation or hollow spaces. Grants of up to £6,000 for biomass boilers and heat pumps.
Following a survey of 12,000 people in England and Wales, Citizens Advice found that around 90% of respondents cite the cost of home renovations, from installing floor and wall insulation to installing double or triple glazed windows, as a barrier to securing housing. .
Less than 20% of respondents said they could purchase a heat pump, which costs an average of £10,000, without borrowing money, while less than 20% were willing to borrow money through a loan or unsecured loan to finance improvements.
In addition to the monetary implications, most respondents did not need to make energy-efficient improvements to their homes. Only 40% expressed interest, and most prefer measures such as attic insulation and double or triple glazing to installing a heat pump, forged insulation. walls and insulation of cavities and floors.
A similar number said they would invest in electric power measures after learning they could save an average family £300 on their annual energy bill, demonstrating the need for incentives.
About 30 per cent of respondents are concerned about the effectiveness and adequacy of the measures taken.
The survey also found that age influences homeowners’ enthusiasm for their homes. Respondents between the ages of 18 and 34 were nearly three times more likely to be interested in installing a heat pump than homeowners over the age of 55.
According to the Energy Saving Trust, fewer than 250,000 of the UK’s 29 million homes have heat pumps, but the government expects millions more to have them in the next 10 to 15 years to meet its net-zero emissions targets.
Analyst Cornwall Insight says power companies could start offering fixed-rate and fixed-term deals as early as July, as wholesale prices stabilize at lower levels than they’ve seen in more than 18 months, writes Candiece Cyrus.
Fixed competitive agreements have been virtually non-existent since the market fell into crisis ahead of Russia’s invasion of Ukraine in February last year and subsequent sanctions on Russian fuel exports.
Wholesale costs rose in 2021 as fears of clashes grew and more than two dozen energy providers closed their doors.
However, the combination of a mild winter and lower visitor demand in 2022/23 led to higher-than-expected European storage levels, helping to ease energy concerns and curb market volatility.
At present, the government’s Energy Price Guarantee, which was introduced in October last year to help families facing emerging energy bills, limits the amount businesses can rate their consumers according to the unit of energy and at constant tariffs, to £2,500 per year on average. .
It replaces the price cap, set quarterly by energy regulator Ofgem, which limits the amount energy companies can rate their consumers based on the unit of energy and constant price lists based on wholesale prices.
Lately, energy suppliers set their prices based on the warranty. However, from July, Ofgem’s price cap risks undermining the government’s guarantee, in which case companies will only offer rates equal to or below the cap.
Cornwall Insight predicts that the cap will fall to £2,063 per year for an average household, over the constant period between July and September, from its current point of £3,280. It says the cap is expected to remain solid over the next year, emerging at £2098 per year between October and December and then at £2162 per year between January and March 2024.
While ongoing agreements can help consumers in the electricity sector to better manage their bills, given that their unit rates will remain the same for the duration of the agreement (typically 12/24 months), it is worth bearing in mind that there is a threat of wasting by paying less if the wholesale value is reduced. Energy prices fall in this period.
Dr Craig Lowrey of Cornwall Insight says: “As the wholesale energy market has stabilised in recent weeks, our price cap forecast has followed suit. Some energy suppliers will potentially look to take advantage of this opportunity to repair constant price lists near or close to the price cap, with strong projections reducing fears of long-term losses.
“This potential resurgence of competitive tariff proposals gives families the opportunity to still control their energy expenditures, after having been hit hard by the energy crisis. While this sounds positive, setting energy prices is a gamble, the market can be transmitted both downstream and upstream, and households risk being forced to pay expenses above the value limit.
Regulator Ofgem tweeted the message THINK BEFORE YOU REPAIR today, adding: “Fixed energy price lists would possibly re-emerge in the market, but check to see if they suit your needs. Prices are still unpredictable and subscribing now at a constant rate can also mean missing out if costs go down. “
Energy regulator Ofgem is proposing the creation of a common universal register of priority services that would allow vulnerable families with certain benefits subject to means verification to register once to learn more about application services, writes Candiece Cyrus.
Currently, consumers will need to log in with each company’s login. The non-unusual login proposed by Ofgem would unify existing databases of energy corporations and other utilities, adding water providers.
Clients are vulnerable for reasons such as age, illness, disability, or the presence of dependent youth in their household.
Customers officially known through a company as vulnerable get additional support perks such as:
Jonathan Brearley, Chief Executive of Ofgem, commented: “Our regulations obviously require network providers and companies to use their priority login service to deliver adequate services to customers. This is an incredibly important component of licensing cases, and we will respond vigorously if it is not.
“We deserve everyone to create a common record, not only between water and energy, but also to add wider sectors and potentially local and national governments, such as the knowledge held through the Department for Work and Pensions.
“Ideally, this common registry would be based on the ‘tell us once’ principle: families with vulnerabilities notify a company and, with permission, this data is shared among others with a single, trusted source of knowledge to anticipate, identify, and respond. to the wishes of our customers.
The energy regulator says corporations aren’t doing enough to inform their consumers about the services they can get if they’re vulnerable. According to their research, only one in three clients are aware of the lifestyles of a priority services login and of those who do, a significant minority who would possibly be eligible for assistance depending on their situation, are not.
Elizabeth Blakelock, senior policy director at Citizens Advice, tweeted: “No single regulator can do this imaginable; they only have the ability to run corporations in their sector. Therefore, we want the government to set up an operational organization to agree on the scope of this formula and ensure the participation of companies.
Ofgem, the energy market regulator, has today published a code of conduct for energy suppliers, which outlines how they perform unintentional (or forced) installations of prepaid meters (PPMS), writes Bethany Garner.
The aim is to limit installations in vulnerable households, with a total ban on other people at risk (see below).
The unintentional installation of PPM is used as a last resort for consumers who have significant arrears on a popular energy meter. But in recent months, suppliers such as British Gas, Scottish Power and Ovo have been criticised for forcing them into homes occupied by “vulnerable” areas. consumers, adding the elderly, which is not allowed.
The problem arose when the Times reported on cases of vendors’ representatives breaking into homes to replace the meter.
Forced installations have been temporarily banned since the case broke in March. They will resume in May, circumstances permitting, and suppliers will need to meet a number of criteria before proceeding.
The code, developed in consultation with Citizens Advice, Energy UK and other stakeholders, will come into force today. All energy suppliers in England, Scotland and Wales have registered.
It prohibits providers from requiring the installation of PPM for consumers that Ofgem deems to be “high risk”.
This category includes adults over the age of 85, other people with serious or terminal illnesses, and those who require a constant source of electrical power for medical reasons. These other people would possibly rely on electrical appliances such as ventilators or dialysis machines.
The Code also clarifies the cases in which forced installations of MPP are possible.
Suppliers install a PPM unless the visitor has not paid their invoice for at least 3 months or is in significant debt of at least £200 for fuel.
If the visitor already has a debt repayment plan, the provider installs PPM without their consent.
While consumers in the “high vulnerability” organization come entirely from an unintended facility, Americans classified as “medium risk” will be reviewed on a case-by-case basis before proceeding with a forced installation.
This organization includes families with children under the age of five, seniors (over the age of 75), and others with severe physical or intellectual fitness issues.
Our power spokesman, Kevin Pratt, said: “It’s good news that the wellbeing of those deemed most at risk will be affected by the new rules, but charities are concerned that others – the under-85s and some other people with serious illnesses or young people – may literally be left behind, because forced installations will still be allowed.
Caroline Abrahams, charity director at Age UK, said: “It’s smart that some regulation is coming into force to start limiting the practice of forcibly installing prepaid meters, which used to be something of a Wild West, but those new regulations don’t do that. It doesn’t go far enough.
“We believe that no older user deserves to be subjected to this treatment, not just those over the ages of 85 and 75, who are considered vulnerable in some way, partly as a matter of precept, but also because of considerations about the efficacy of the treatment. treatment. Vulnerability assessment will be conducted.
“The risk is that some older people, and also younger people, who are probably not on a prepaid meter, will end up using one. “
The Code of Practice states that:
Pratt added: “The root of the problem is simply that energy is too expensive. As a result, families find themselves with unmanageable arrears on their popular meter expenses and end up being forced to sign an early payment agreement. But we will only achieve this through radical measures, such as the arrival of a social tariff that subsidises the costs of the most vulnerable.
“For this to happen, we want buy-in from the regulator, the suppliers and most importantly the government and other bill payers who will have to settle for that, a social tariff will actually be funded through everybody’s energy bills. But unless there is a deep structural reform of the troubled energy sector, supported at the social level, it is hard to believe how arguable disorders such as the clumsy and ruthless forced installation of meters can be solved. “
If a vendor installs a PPM in a way that violates the Code, the device will need to be disposed of and the visitor will possibly be entitled to compensation.
Customers who believe that their supplier has breached this code can go to the Energy Ombudsman.
Analyst Cornwall Insight predicts that Ofgem’s energy value cap, which limits what suppliers rate households based on unit of energy and constant costs, will fall to £2,024 a year in July and £2,076 a year in October for a family with typical energy consumption. writes Candiece Cyrus.
This figure is higher than estimates announced last week of £2,000 a year for July and £2,023 a year for October, indicating continued volatility in the wholesale energy market.
The limit for April-June is £3280, up from £4270 in the first quarter of the year.
The cap was implemented lately for household expenses, as the government’s Energy Price Guarantee, introduced in October last year, caps spending at £2,500 a year for a typical family. It will remain at this point until March 31, 2024.
Once the limit falls below the EPG level, the EPG will disappear and the limit will be implemented again for household expenses. While this would constitute significant relief in expenditures, it would still be particularly higher than the pre-2021 peak level.
Lowrey said: “The energy market has had a challenging ride over the past three years, facing energy costs at levels never seen before.
“Our forecast for the current part of 2023 points to the prospect of a stronger energy climate that, all things being equal, will see energy expenditures continue their downward trajectory. However, in the short term, they remain above all times. Maximum.
“Of course, we never take anything for granted, and as soon as they subside, global shocks and our dependence on energy imports can cause the energy market, and consequently bills, to rise again. “
Cornwall Insight also says that businesses that had to pay their energy expenses when wholesale costs peaked in August last year will see their electricity expenses rise by as much as 133% from tomorrow.
Most business energy price lists have a fixed term, and companies can only transfer to suppliers a “renewal window” toward the end of the period. This means that they are at the mercy of the market prices prevailing at the time.
Cornwall Insight says the price increase is due to government relief for businesses, with the Energy Bill Relief Scheme replaced by the less generous Energy Bill Discount Program (EBDS) on April 1.
The analyst’s announcement follows a warning from the Federation of Small Business that emerging energy costs could force 370,000 businesses to downsize, restructure or, in the worst-case scenario, close their doors (see article below).
Under the new plan, which will be in place until March 31, 2024, companies will benefit from a greatly reduced reduction in the unit value of their fuel and electricity once wholesale prices reach a certain threshold. Companies that are large consumers of energy, also known as commercially extensive industries or ETIIs, will have to apply for a giant rebate.
Dr Craig Lowrey of Cornwall Insight said: “The effect of EBDS on businesses is not uniform and will vary widely across sectors. Energy-intensive industries that will receive more help under EBDS are likely to enjoy greater monetary stability, while vulnerable businesses in the U. S. , some of which are already suffering from the post-pandemic, would possibly find the pill to swallow with reduced levels of aid and expensive ongoing contracts.
The Small Business Federation warns that adjustments made over the weekend to government subsidies for business energy prices may force 370,000 businesses to make basic adjustments to their operations, adding to the shutdown in some cases.
On Saturday, April 1, the Energy Bill Relief Program (EBRS) will be replaced by the Energy Bill Discount Program (EBDS).
The new plan, which will run until March 31 next year, offers non-household energy users a reduction in the value of the unit of energy they use. This happens when the value of the unit reaches a certain threshold and is limited to a constant amount.
For maximum non-national energy users in Great Britain and Northern Ireland, these maximum thresholds and rebates have been set at:
Companies that rely heavily on electricity and fuel consumption, known as energy-intensive and commercially extensive industries or ETIIs, will be required to apply for a higher rebate up to a maximum limit, which will apply to 70% of their energy volumes.
For electricity, the maximum rebate will be £89 per MWh with a price threshold of £185 per MWh. For gas, £40 per MWh with a price threshold of £99 per MWh.
Suppliers will apply the reduction to companies’ electricity bills.
The FSB and other industry groups say the offer is particularly lower than that offered through EBRS, which was introduced in October last year to offer a reduction in the wholesale unit value threshold of £211 per MWh for electricity and £75 per MWh per unit. with MWh for electric power. gas.
According to the FSB, 340,000 small businesses that paid their energy costs last year, when wholesale trade was at its peak, will see their expenses increase, in some cases, by as much as several thousand euros.
It says a pub that consumes 48,000 kWh of electricity and 192,000 kWh of fuel a year, which approved a new electricity tariff in August last year, would have seen its estimated annual energy bill of £85,000 cut by £60,000 from EBRS, which is ending on March 31.
From 1 April, under EBDS, you would only get just over £2,000 in aid, leaving you with £83,000 to pay for energy costs.
Therefore, the FSB advocates for an “Aid to Ecology” program as a long-term solution for corporations facing high energy costs. It would offer small businesses a £5,000 voucher to invest in energy-saving measures or even energy production. Premium insulation, solar panels and heat pumps.
He also called on suppliers to show sympathy for the companies and come up with a “broad and mixed” strategy for tariff offers, allowing companies with higher price lists to take advantage of lower wholesale energy prices since January this year.
However, because suppliers buy months in advance, existing costs still reflect the higher wholesale costs paid last year.
Tina McKenzie, political chair of the FSB, said: “The increase in energy costs on April Fool’s Day will not be a laughing matter, but it will surprise thousands of small businesses, which signed fixed-term contracts when the government guaranteed repayment through EBRS.
“Some 370,000 small businesses could also be forced to consider downsizing, restructuring or closing down, as they are highly unlikely to pass on full prices to customers, who suddenly can’t afford to pay £25 for a pizza or see the value of a double pint.
“There’s a lot to do and do besides leaving small businesses alone. Allowing the most vulnerable small businesses to renegotiate or “combine and extend” their energy contracts to better reflect declining wholesale energy costs is the least the government and energy providers can do.
Figures released through the Department of Energy Security
A total of 94,201 prepaid meters were forcibly installed last year, of which the three companies mentioned were guilty of 66,187 meters.
Historically, energy corporations have petitioned the courts for an injunction to obtain permission to enter an asset to replace the occupant’s meter, regularly as the last hotel due to significant arrears.
However, the practice came to light following revelations via The Times that British Gas forcibly installed meters in homes occupied by “vulnerable” customers, including the elderly, which is not allowed.
As a result, Energy Security Secretary MP Grant Shapps suspended the forced installation of prepaid meters until March 31. Ofgem has since extended the suspension until it is glad that companies are complying with a revised code of conduct.
The Chancellor also announced in his March 15 budget that families with prepaid meters will no longer have to pay more than others for their electricity from July. Currently, prepaid rates are higher to reflect the burden of administering the system.
In its investigation of the 2022 figures, the Department of Energy singled out Scottish Power as the “worst offender” when comparing the number of forcibly installed meters (more than 24,300) to its visitor base. The government says this equates to 500 installations consistent with 100,000 measurement points.
British Gas forcibly installed 25,000, while Ovo Energy installed more than 16,000.
This compares to around 10,000 for E. ON, 7,000 for EDF and 4,000 for Shell. Utilita and Bulb forcibly installed more than 2,000, and there were 1,500 through Utility Warehouse, just over a hundred through Tru Energy, and less than a hundred through Ecotricity. , Good Energy and Octopus.
Shapps said today last month: “Today’s figures paint a transparent and frightening picture of the scale of forced installation of prepaid meters, with an average of more than 7,500 forced installations per month recorded last year.
“Following my calls for change, I am glad that suppliers have gone public with their moves and agreed to permanently end the prepayment imposed on vulnerable consumers; However, this happens again.
“I will be closely monitoring Ofgem’s ongoing review to ensure that consumers get what they want, and that vulnerable consumers who have suffered unfairly forced installations get the justice they deserve in the form of redress. “
Shapps also suggested that family assistance providers using classic prepaid meters access the 2. 1 million vouchers that have yet to be claimed under the government’s energy bill scheme.
An increasing number of people with classic prepaid meters are using their vouchers: as of February, 7. 6 million vouchers had been redeemed in two million households. The percentage of vouchers marketed has increased, reaching 76% in January and 78% in February.
The £400 vouchers for family energy expenses in instalments for six consecutive months from October to March.
Providers send consumers of classic prepaid meters their vouchers by post, SMS, e-mail or as automatic credits when top-up. They can be redeemed at the post office or at the 28,000 UK outlets with PayPoint up to 90 days from the date of issue.
Ahead of this afternoon’s budget, the government has shown that its Energy Price Guarantee (EPG) will remain at £2,500 until the end of June. It is expected to rise to £3,000 on April 1.
The cost of subsidies for household energy costs has fallen, giving Chancellor Jeremy Hunt the opportunity to extend the measure, which he says will benefit a typical family with a £160 increase.
The EPG figures quoted above are the annual bill of a family whose average intake is paid in arrears by direct debit. Those who own prepaid meters pay a little more with the EPG, but Mr Hunt also has the budget to close this hole so that the so-called prepaid premium is eliminated.
This will save average prepaid admission consumers around £45 a year when it arrives later this year.
The government says that if the EPG had been submitted in October to update the price cap applied by Ofgem, the market regulator, average expenses would have risen to £4,279 per year this winter.
The value limit, which is reviewed quarterly, will fall to £3280 on April 1, still above the EPG. However, the cap will fall to £2013 in July, when suppliers will be required to offer lists of values in accordance with the cap, which the EPG.
The sharp drop in wholesale fuel costs in recent weeks has still been reflected in household expenses, as suppliers buy in advance; Existing expenses still reflect wholesale costs paid in the autumn.
But if wholesale prices continue to fall, it is believed that we could see a resurgence of the festival among suppliers, with very high price lists being used to inspire consumers to transfer businesses, a market phenomenon that has not worked for 18 months.
The EPG will remain in place until the end of March 2024, returning to £3,000 on 1 July. It will come back into play if the Ofgem limit exceeds this figure due to emerging wholesale prices.
As well as forecasting the cap to be £2,013 from July to September, industry analyst Cornwall Insight predicts it will be £2,002 in the fourth quarter.
Hunt is expected to announce in his speech a further reduction in the cost of living by adding higher prices to child care prices for parents with universal credit.
No announcement was made prior to the budget about advertising energy consumers, whose higher expenses inevitably translate into higher prices.
Danni Hewson, head of financial analysis at AJ Bell, said: “From local swimming pools to the industrial-sized greenhouses in which our valuable salad is grown, energy prices have become enemy number one. This budget may have been presented simply as a budget to spur expansion, but without more for businesses and households, expansion can be difficult to incubate.
Energy regulator Ofgem has extended a ban on the forced installation of prepaid meters beyond the end of March.
The ban, which also applies to remote switching of smart meters via prepayment, was introduced last month through Ofgem at the request of Energy Secretary Grant Shapps MP. This followed reports in The Times that British Gas had forcibly installed prepayment meters at the premises of vulnerable customers.
It later emerged that other providers were also not treating their consumers by switching them to prepaid meters to restrict arrears on their accounts (see stories below).
A code of practice is being developed to ensure that consumers’ interests are linked to the use of prepaid meters.
Jonathan Brearley, chief executive of Ofgem, told members of the all-party parliamentary committee on business, power and business strategy that their priority is to get the industry to act in order: “Companies will only restart services when and if they can identify that they are acting in accordance with the new code of practice.
Citizens Advice, the body responsible for energy consumers, is calling for the arrival of a reduced “social” tariff for suffering families who meet the official definition of energy poverty, writes Candiece Cyrus.
Households that spend more than 10% of their income (housing costs) on energy expenditure are considered to be in a situation of energy poverty, and lately around 10 million families are in this situation.
The agreement says that number will rise to 12 million families if the government’s power is reduced on April 1, as planned.
Currently, the Guarantee subsidises bills, so a typical family will pay £2,500 a year for fuel and electricity. That figure would rise to £3,000 (a 20% increase) from April if the planned adjustments come into effect, reports Citizens Advice. It says the guarantee is expected to remain at £2,500 after an extensive lobbying campaign through charities and customer groups.
An announcement on the long-term Guarantee is expected in next week’s budget.
If the warranty didn’t work, typical energy expenses would be more than £4200 today and around £3300 from April. Citizens Advice reports that families are paying twice as much for energy as they did in 2021, with families having the lowest source of income. spending more than 50% of their source of income after home prices on energy expenses, up from 34% in 2019.
The concept of a subsidised social tariff was introduced last year by Keith Anderson of Scottish Power. Ofgem, the market regulator, is investigating how that fee would work and, crucially, how eligibility would be decided (see articles below).
Citizens Advice says a social tariff can simply reduce expenses depending on a household’s source of income and energy consumption, with an average saving of £381. Cuts can be up to £1,500 for households with the lowest source of income.
Dame Clare Moriarty, chief executive of Citizens Advice, said: “Energy affordability is a long-term factor that demands a long-term solution. A social tariff protects millions of other people from overspending on their bills.
“High energy costs have forced many other people to alternate between heating and eating. Uncertainty about upcoming peak costs only adds to the strain and worry felt by families across the country.
“This policy will help make energy costs more affordable in the coming years and support the transition to warmer, safer homes that are in a position to move to net zero. “
The announcement of the proposed social tariff follows Age UK’s call for a “prepaid amnesty”, which would allow the UK’s 4 million families with prepaid meters to ditch their fee-free meters and replace them with a credit meter.
According to Age UK, 25% of the 4 million households with a prepaid meter have an occupant over the age of 60, and 85% of this organisation are in energy poverty and/or receiving benefits, meaning they have the lowest income. He says he’s been contacted through other people who “tune out” because they can’t recharge their meters.
Ofgem, the electricity regulator, has announced that its price cap for the three months from April to June will be £3,280 per year for a dual-energy household paying by direct debit on their average consumption. It currently stands at £4,279 per year. .
The new cap will not be used for household expenses, as it will remain above the government’s energy value guarantee, imposed last October when the cap spiked in reaction to emerging wholesale stocks.
Currently, the government guarantee is £2500 per year (for typical families). It will hit £3000 on April 1, the same day that Ofgem’s new cap comes into effect. This increase in collateral will lead to a 20% accrual in family bills.
Charities are calling on the government to keep insurance at £2,500 to worsen the cost-of-living crisis for consumers who are already struggling to pay their bills.
The effect of energy expenditure on household budgets will also worsen from April, as the final bills of the government’s £400 energy bill relief scheme, spread over six monthly instalments from October 2022 to March 2023, will have been paid.
The burden on taxpayers to subsidise household energy expenses is actually the difference between the guarantee limit and the Ofgem limit. While the gap narrows as wholesale rates fall, campaigners say the impact on public finances is diminishing to the point where it is moderate to keep the collateral at £2,500.
They further point to forecasts that the Ofgem limit will fall further in July, when it is reviewed next time. Analyst Cornwall Insight, who has a track record of predicting cap moves (he estimated £3,294 for April’s figure, or just £14), says July’s cap will be £2,112.
In addition, it expects the cap to remain virtually unchanged in October, at £2,118. It bases its forecasts on research into existing and “long-term” wholesale prices, with the latter being responsible for securing long-term supply.
Once the limit falls below the guarantee level, the guarantee will prevent it from being executed and providers will be forced to qualify at or below the limit level.
This means that the government would have to keep the limit at £2,500 for a further three months, after which the need to subsidise expenditure would cease.
A long-term government-related announcement for domestic and advertising power is expected in the March 15 budget.
Some recommend that the downward trend in wholesale costs may simply lead to a rollback of tariff adjustments as suppliers reintroduce competitive fixed-price arrangements.
Regulator Ofgem calls on providers to reimburse and remove prepaid meters (PPMs) when they have been improperly installed on customer premises, writes Candiece Cyrus.
Earlier this month, The Times revealed that British Gas had used excessive and misplaced means by forcibly installing prepaid meters, adding to the deployment of locksmiths to gain access to vulnerable customers’ properties.
In response, Ofgem launched an investigation into the British Gas case and into prepaid meter installations in general.
Following the intervention of MP Grant Shapps, Secretary for Energy, suppliers agreed to suspend the installation of prepaid meters until 31 March.
Commenting on Ofgem’s investigation, Shapps said on Twitter: “Forcing other vulnerable people to use prepaid meters is a scandal. I have made it clear that I need reparations for those who have been harmed.
“It’s true that Ofgem is investigating lately. We will have to take strong action where it has happened, they cannot be beaten. “
Ofgem says corporations deserve to use the time until the end of March “to review all of their recent forced and remotely switched PPM installations, and if any wish to be cancelled, and offer refunds where strict regulations have not been met. “
Remote switching is the procedure of electronically modifying a smart meter to work with an advance payment system and not a credit system.
Industry regulations allow energy providers to forcibly install prepaid meters once they have received a court order. However, Ofgem states that this deserves to be a last resort and should not be carried out if the consumer is deemed vulnerable, which includes having underage children. five years of age, be pregnant, be of retirement age, or have a disability or intellectual fitness condition.
Jonathan Brearley, chief executive of Ofgem, says suppliers could face fines if systemic issues are detected in their PPM practices.
As part of its review, which will be completed in April, Ofgem will look at what additional protections energy consumers might need in relation to the installation of prepaid meters, and where the need for consumers to switch to prepaid schemes can be reduced.
As part of its investigation into British Gas, the company said it would assess that the supplier:
Cornwall Insight has further revised its estimate of the April iteration of Ofgem’s energy value limit, which will be presented today by the regulator in a week’s time.
The analyst predicts that the limit will be £3,294. As this amount will be higher than the government’s energy value guarantee point of £3,000 a year for typical household expenses, the cap will not regulate what other people pay.
The guaranteed value is currently £2500 and will increase to £3000 on April 1st, a 20% increase. March will also see the end of the government’s plan to phase out £400 in energy bills, adding extra pressure to household budgets. .
Cornwall Insight says the quarterly-updated cap will fall below the price guarantee point in July, saying the cap will then be £2,153. 34. The forecast for the October cap is £2,161. 05.
Once the cap falls below the guaranteed cap, the government will no longer subsidize energy expenses and suppliers will have to offer rates at or below the maximum level.
This raises the possibility that consumers could move to competitive offers if vendors create attractive fixed-term offers to capture market share.
However, it is worth remembering that, even at around £2,150, the limit in July would still be almost £1,200 higher than in July 2022, when it stood at £1,971, again for households with average consumption.
The relief at the limit point reflects the lower prices that utilities pay in the wholesale market to secure their long-term supplies. Prices are falling as countries look for opportunities for Russian natural gas.
The cap will remain maximum for the time being to reflect the higher costs companies already pay for the fuel they get now and over the summer.
Lower wholesale prices could prompt the return of festivals to the energy market from July, allowing consumers to opt for less expensive deals, according to industry analyst Cornwall Insight.
In the years leading up to 2021, before the current energy crisis, around six million families changed suppliers every year, moving to constant price lists lasting 12 or 24 months.
Its value is lower than that of the popular lists of variable rate securities (SVTs), whose value is limited as of 2019 by a maximum value set by the market regulator, Ofgem.
However, as wholesale costs increased in the second half of 2021 and into 2022, the availability of reasonable answers dried up and SVTs have become the least expensive option. Since all suppliers set their number one distributors’ prices at or near the ceiling of Ofgem, the incentive for transfer has disappeared.
Since then, as the cap has increased in reaction to rising wholesale costs, the government has implemented the Energy Price Guarantee (EPG), which is lower than the Ofgem cap, and means that costs per unit of energy used are kept at a certain point. for all domestic customers.
According to the EPG, the average annual bill for a family is £2,500. If the limit were still in place, this figure would be £4,279.
However, the average EPG bill will rise to £3,000 a year from April as the government reduces support. This value will still be below the value limit set at this stage, however, in July the limit will fall to around £2,360, and energy expenses will have to reflect the point of the cap, not the EPG.
Cornwall Insight commented: “There is a good chance that providers will offer fixed rates that compete with the government’s price caps, reviving the benefits of switching providers.
“Looking at the outlook for change, we note that if wholesale market volatility returns, such as that experienced in 2022, it may become unprofitable or impractical for suppliers to offer the kind of competitive rates in question.
“However, existing market conditions suggest that households are possibly more concerned about the energy market than they have been in recent times. “
Price differences between suppliers can persist because companies buy energy materials in bulk in advance, at other times, and at different prices. Some might also choose to undercut their competition to secure their market share.
All energy providers have agreed to prevent the forced installation of prepaid meters in customers’ homes. The move responds to the government’s demands to replace its practices (see story below), Cyrus writes.
Secretary of State for Energy Grant Shapps (M-Calif. ) wrote to providers last Sunday, asking them to tell him what their consumers look like and how many mandates each of them has to forcibly install prepaid meters.
On Tuesday, it set a deadline for suppliers to tell them how they would deal with the scenario of consumers who did not have prepaid meters installed, adding the payment of compensation.
Today’s announcement of the cessation of forced installations follows Judge Edis’ order to magistrates’ courts to approve arrest warrants this week.
However, Shapps believes the industry’s regulator, Ofgem, wants to do more to oversee how electricity corporations treat their consumers. Ofgem said it would ask consumers about their experiences, and not just providers.
While all of the vendors responded to Mr. Shapps, with several of them outlining solutions for their customers, such as refunding or replacing a prepaid meter with a credit meter, he said several of them had provided main points about their plans.
Ofgem is asking its suppliers to cater to vulnerable consumers who are suffering with their bills, for example by providing them with affordable payment plans and only offering them prepaid meters as a last resort.
Vulnerable customers include seniors, other people with disabilities, and parents of young children.
A recent article in The Times revealed that British Gas had used locksmiths to enter homes to install prepaid meters because occupants were using their credit meters.
Providers have also switched meters remotely to prepaid mode.
Since last summer, Charity Citizens Advice has also been calling for a ban on forced installations, after the number of other people who may simply not increase their prepaid meter exceeded levels of the last 10 years combined.
Shapps says he will “continue to stand up for vulnerable consumers whose homes have been invaded and ensure this happens again in the future. “
He added: “It is understandable that people have been shocked and appalled by the extent to which people’s homes have been invaded and prepaid meters installed against their will, and suppliers are just the beginning of correcting this abhorrent behaviour.
“I am irritated that some have so freely moved vulnerable consumers to prepaid meters, without a proper plan to take corrective action in case of non-compliance. So I’ve only won a share of the table, as it still doesn’t involve enough moves to offer redress to those who have been treated so appallingly.
Prime Minister Rishi Sunak has split the Department for Business, Energy and Industrial Strategy (BEIS) into three new departments, writes Candiece Cyrus.
It established the Department of Energy Security and Net Zero, along with the Department of Science, Innovation and Technology and the Department of Business and Commerce.
It “reorients” the Ministry of Culture, Media and Sports.
Grant Shapps, MP, moved from Secretary for Business, Energy and Industrial Strategy to Secretary of State for Energy Security and Net Zero.
Following his appointment, Shapps tweeted: “My goal will be to protect our energy source in the long term, reduce expenses and thus help cut inflation in half. “
On Sunday, Shapps gave utilities until the end of the day (Tuesday) to tell him what action they would take if they were found to have improperly installed prepaid meters on vulnerable customers.
The Secretary of Science, Innovation and Technology is Michelle Donelan, M. P. Secretary of Culture.
The Secretary for International Trade, MP Kemi Badenoch, has been appointed Secretary for Business and Trade. She remains Chair of the Board of Trade and Minister for Women and Equality.
Lucy Frazer KC MP is the new Secretary of State for Culture, Media and Sport, and in the past served as Minister of State for Housing and Planning.
Analysts at Cornwall Insight have released revised forecasts on the energy value cap for the rest of the year that, if accurate, will see the cap diminish the government’s guarantee of energy value, writes Candiece Cyrus.
The price cap introduced in 2019 by industry regulator Ofgem, to limit the amount that energy suppliers can rate families per unit of energy and for the associated ongoing costs.
Updated quarterly, in reaction to wholesale energy costs, it now stands at £4279 for the period January to March 2023.
However, thanks to the government guarantee, which subsidises the cost of the song by an average of £2,500 a year until the end of March, the cap is not being used lately for domestic consumers – the Cornwall Insight figure shows what a household with average consumption can do. I would pay if they were.
The guarantee point will be £3,000 in April and will last for 12 months.
Cornwall Insight predicts that the cap will fall to £3,338 in April, before dropping further to almost £2,362 in July. This would bring the limit back under the guarantee, making the latter redundant at this level; Then, family expenses would be decided. across the line. However, they would still be well above the £1,271 average in place 12 months ago.
In October, analysts expect the cap to be £2,389, which is still under warranty.
Forecasts for the cap are diminishing, as European countries in the past relied on Russia for their natural fuel energy supply.
Warmer temperatures have also helped energy demand, which has lowered wholesale prices.
Energy Secretary Grant Shapps MP has given energy providers until Tuesday to tell him what action they would take if they are found to have incorrectly installed prepaid meters in the homes of vulnerable customers.
Mr. Shapps is in favour of payment of reimbursement in such cases.
As stated below, British Gas has pleaded guilty in cases where vulnerable households, including those with young children or physical conditions, were not treated or compassionate.
News of the scandal, reported via the Times, includes reports of debt creditors breaking into homes to install prepaid meters. There are also reports that some providers are remotely switching smart meters to prepaid mode.
Shapps is not pleased with the fact that a series of reviews carried out by regulator Ofgem on energy suppliers have failed to identify this unacceptable behaviour or other significant shortcomings, and have even given some corporations intelligent suitability checks.
He ordered Ofgem to get stricter with energy suppliers and investigate visitors’ experience with their performance, adding that it introduced a new visitor reporting formula that allows families to share their own stories about how they are being treated.
Shapps said: “I am appalled that vulnerable consumers suffering with their energy costs have had their homes invaded and prepaid meters installed when there is a transparent legal responsibility for providers to provide assistance.
“They want to refocus their efforts on their consumers, who are the ones who suffer from this abhorrent behavior.
“I’m also concerned that the regulator is too easily fooled by taking at face value what the utilities tell them. You will need to pay attention to consumers to ensure that this remedy for vulnerable consumers is not applied again.
Last Thursday, several suppliers announced that they would suspend forced installations after Ofgem insisted that they suspend the practice. But just this week last week, Shapps has cracked down on the mistreatment of power users through providers, asking them to voluntarily dedicate themselves to ending the practice.
Regulator Ofgem has acted to quell the growing controversy over the forced installation of prepaid meters through electricity companies, in families known as “vulnerable”.
The move, which would come with asking energy suppliers to suspend all forced installations, follows an investigation by The Times that found British Gas had used locksmiths to enter homes so that meters could simply be changed.
Ofgem said: “These are incredibly serious allegations from the Times. We are launching an urgent investigation into British Gas and will be hesitant to take enforcement action by the company.
“It is unacceptable for a provider to impose forced installations on vulnerable consumers who have to pay their expenses before all other functions have been exhausted and without conducting thorough checks to ensure this is feasible.
“We have introduced a market-wide primary investigation to investigate the immediate expansion of prepaid meter installations and the potential licensing violations that require it.
“We are clear that providers want to work hard to take care of their consumers this time, especially those who are vulnerable. The electricity crisis is not an excuse for unacceptable behavior towards a customer, especially those in vulnerable situations.
There are around 4. 5 million families with prepaid meters in the UK. Many homeowners prefer them and are also used when consumers are unable or unwilling to pay for their energy usage in installments through a monthly or quarterly bill.
However, prepaid meters are more expensive than credit meters due to higher administrative costs.
When a visitor with a credit meter has significant arrears, energy providers can petition the courts for a court order to install a prepaid meter to save them additional arrears.
But the alleged use of forced access to homes occupied by vulnerable families through agents working on behalf of British Gas has prompted complaints that the total formula is open to abuse.
Energy Minister Graham Stuart has asked British Gas for assurances that its “totally unacceptable” behaviour will be repeated.
He said on social media: “I need to see accountability at the highest levels of the company and an explanation of the private role he [Chris O’Shea, chief executive of British Gas’ owner Centrica] will take to address those same serious cultural issues and regain public trust.
“Most importantly, I need those affected by this situation to be known and granted reparations. Even if the irregularities cannot be remedied, a truly large refund can be granted.
“British Gas has trusted me that this procedure has commenced and I will follow the case very closely so that justice prevails. “
O’Shea told the BBC that British Gas had suspended the obligation to install prepaid meters.
Ofgem has already announced a review of the installation of forced prepaid meters and the remote transfer of credit meters to prepaid operation.
The regulator also published an investigation into the functionality of the visitor service and court cases on data submitted through 17 energy providers. Found:
In addition, Ofgem discovered the following in relation to express companies:
Ofgem is unable to identify suppliers that do not have weaknesses. It has initiated a commitment to compliance in spaces that require improvement.
Households with smart meters will again have the opportunity to get credits for their energy expenses tonight through the call for flexibility service through National Grid and energy providers, writes Kevin Pratt.
The service, designed to reduce electricity consumption at peak times and ensure security of supply, will last from 4:30 p. m. to 8:30 p. m. Last night (Monday), the program was operational for the first time after a series of tests last year: it ran from 5 to 6 p. m. , with the participation of around one million households.
Monetary praise, which is typically paid as a discount on the next bill, is determined based on the amount of unused energy compared to the time in question. A family that reduces consumption by one kilowatt-hour can save between £3 and £6, according to National Grid, although it is up to each supplier to determine the actual amounts.
To participate, you need a Wise meter and your energy provider will need to be enrolled in the program – they will contact you the day before the Service is up and running if this is the case.
If your supplier is not participating, you may need to hire a third-party company to pull the applicable core data from your meter through an app. Participant details can be found here. Domestic and commercial consumers are eligible.
The main aim of the programme is not to aggregate demand in England, Scotland and Wales, where it operates. Rather, the goal is to smooth out the increase in demand at peak times and the strain on the grid, thus avoiding power outages.
National Grid says it’s managing the task as a precaution and that people shouldn’t have to worry about power outages. Industry observers say the challenge is due to a number of reasons, adding the lack of natural fuel storage capacity in the U. K. , which is used to generate electricity, and a calm climate, which has reduced output from wind farms.
The grid is also restarting coal-fired power plants that have been suspended, as an additional backup, especially if the bloody outage continues. At the moment, the option to reactivate the DSR service is planned until the end of March.
MP Grant Shapps, the Business and Energy Secretary, has written to energy providers asking them to stop forcibly moving consumers to prepaid meters without offering good enough to those who are struggling.
Shapps calls for a voluntary commitment to end this practice. It also asks providers to percentage the number of arrest warrants they’ve implemented in recent months, allowing them to replace a home’s meter.
The government says providers are stepping up their efforts to help consumers with monetary difficulties before forcing the transfer to an early payment arrangement. Statistics show that many families who are forced to transfer have their power cut off because they don’t have the cash to qualify for their new subway.
National Grid’s flexibility service call will be used for the first time tonight between five and six o’clock in the evening. due to an expected increase in demand due to cold weather. He said: “This doesn’t mean that the electrical power source is in danger and other people shouldn’t be worried. These are precautionary measures for the unused capacity reservation we need.
The service allows consumers of contracted energy providers to be financially rewarded if they reduce their electricity consumption at peak times. Customers, who will be required to have a smart meter, are contacted in advance through their provider in order to participate. The amount earned through participants can cost up to £10 depending on how much your overall strength intake decreases over the course of the hour.
National Grid has also called for turbines to fire coal-fired power plants to improve security of supply.
Shapps believes it’s possible that corporations are simply offering more credit, debt relief, or debt counseling. He asked providers to talk about conceivable steps they can take to help consumers and avoid forced gatherings.
He says courts are “inundated” with requests for injunctions, with reports that giant lots are being approved in a matter of minutes. The government wants the procedure by which providers take these instances to court to be fair, transparent and supportive of vulnerable customers.
Shapps said, “Providers are obviously taking the plunge and moving at-risk consumers to prepaid meters before providing them with the assistance they are entitled to; I just can’t believe that every conceivable opportunity has been exhausted in all those cases.
“I am deeply involved in reports that consumers have been forcibly moved to prepaid meters, and some forcibly disconnected, and literally left in the dark.
“Instead of immediately looking for a new way to extract money from visitors, I want vendors to put an end to this practice and end up being more understanding, providing the kind of tolerance and that a vulnerable visitor who is suffering to pay deserves to be able to wait. “
The government has resisted calls for a moratorium on the forced replacement of advance payment, saying this could simply lead to a backlog of court appeals as providers pull out to collect debts from families in arrears.
Some energy providers are already taking steps for consumers, such as postponing the remote transfer of smart meters to prepaid or offering more credit to consumers who are struggling to pay. The government needs all providers to develop these types of systems to avoid the use of forced arrangements.
Providers are also being asked to step up their efforts to ensure families use vouchers issued under the government’s energy bill scheme so they can reduce their out-of-pocket energy expenses.
The government claims that 71% of vouchers have already been redeemed and has published a list of supplier redemption rates that shows which companies are taking on their responsibilities and which want to do more.
At the most sensitive point on the list for the maximum number of vouchers redeemed is E Gas
A summit will be held in the coming days involving the government, suppliers, regulator Ofgem, industry framework Energy UK and charity Citizens Advice. On the agenda will be a plan to tackle so-called “bad behavior” by energy suppliers. . In addition to publishing usage rates from the right vendors, this includes:
Ofgem said it had the strength to ban the installation of forced prepaid meters, but pledged to examine:
He said that when he finds that the companies have not done their due diligence, he will take legal action. It involves reviewing the rules regarding when a court order can be issued and what actions should be taken first.
The regulator will also present what it calls a “serious assessment” of the concept of social tariff. This would be more for consumers with financial needs and has been presented through industry figures as a way to address the affordability issues of energy bills.
Ofgem will look at how such a fee would be administered, adding how other people would be eligible, how any subsidy would be paid and through whom.
Jonathan Brearley, chief executive of Ofgem, said: “If [a social tariff] can work, it could address the root cause of this challenge and the misery many consumers find themselves in this winter. “
Market analyst Cornwall Insight has lowered its forecast for Ofgem’s energy value cap for the rest of this year due to the fall in the wholesale value of energy, writes Candiece Cyrus.
The limit on what suppliers can rate domestic consumers for energy pools and constant tariffs is set by the regulator every three months by reference to prevailing wholesale energy prices. For the period January-March 2023, it is £4279.
Cornwall Insight forecasts that it will first rise from its current point of £3208 in April, before falling further to £2201 in July and then seeing a slight increase to £2241 in October.
The immediate increase in the cap in the second half of 2022 led the government to introduce the Energy Price Guarantee in October. At present, this lowers the limit and means that the annual expenses of a family with an average consumption are around £. 2500 until April 2023, when the warranty limit will increase to £3000 for an additional year.
However, if the limit falls below the Guarantee point, the Guarantee becomes redundant and suppliers must meet the limit again.
Ofgem commented: “While the Energy Price Guarantee will continue to apply, it will be placed on consumers’ most sensible bill, and consumers will be charged the EPG or maximum value rate, whichever is lower.
“In the event that the value cut-off point falls below the EPG point, providers must still overcharge consumers beyond the value cut-off point. “
Despite the revised forecast, the value limit will remain well above its £1,227 point before last year’s energy crisis.
Dr Craig Lowrey, senior consultant at Cornwall Insight, said: “We don’t know what will happen in the coming months and there is a long way to go before we can be sure what the true unit rates will be beyond the summer.
“So, while falling wholesale markets and capitalisation forecasts could be cause for celebration, nothing is guaranteed in this new European energy market. Reading too much, too soon, about a fall in value can also be just as risky as reading too much, too soon, about an increase in value.
“Politics wants to be ‘in tune’ with sudden changes and to be elastic and responsive in that environment. “
Energy providers continue to require their customers, including other people with disabilities and those with long-term physical conditions, to use prepaid meters, according to Citizens Advice.
Under the marketplace’s rules, providers can’t impose prepaid plans on the most vulnerable, such as other people with disabilities. The regulator, Ofgem, only allows actions such as the last hotel to collect the debt, if the visitor is not in a vulnerable situation. situation. The regulator reminded suppliers to comply with the rule last October.
However, Citizens Advice says providers are directing consumers with disabilities to prepaid plans and that a large number of consumers with electrical disabilities are unable to collect.
There are around 4. 5 million households with prepaid meters in the UK, of which around 1. 4 million are
including a user with a long-term medical condition.
Citizens’ Council reports that, in the month following Ofgem’s warning in October, around a third of them (470,000 houses) were abandoned because they could not recharge.
More broadly, Citizens Advice estimates that 600,000 families were forced to use prepaid meters because they may not be up to date with their energy bills in 2022. This includes providers remotely switching family meters to prepaid plans, without the need to manually install a new one. meter.
An estimated 160,000 families could be forced to use prepaid meters until the end of this winter if no action is taken.
Overall, the study found that 3. 2 million families across the UK ran out of credit on their prepaid meter last year because they may not have updated it. Most of those families (two million) may simply not qualify more than once, while nearly a fifth (19%) spent at least 24 hours without fuel or electricity.
In 2022, he says he saw more people who couldn’t turn up their meter more than in the last 10 years combined.
The charity is calling for a ban on the mandatory installation of prepayment meters until new protections are put in place to prevent families from running out of fuel and electricity if they are unable to access credit.
Last week, the Resolution Foundation said that other people with disabilities are disproportionately affected by emerging energy costs.
The think tank’s Costly Differences report, which includes a YouGov survey of about 8,000 working-age adults, adding 2,000 who reported a long-term illness or disability, found that 48% of other people with disabilities surveyed had to use their energy this winter. .
Thousands of businesses are at risk of caving in following the government’s decision to cut their energy costs, business leaders have warned, writes Candiece Cyrus.
The government has announced that it will update its existing commercial energy expenditures with a new energy bill relief program starting April 1, 2022.
The Federation of Small Businesses (FSB) said: “While the new year deserves to be a time of optimism and excitement, 2023 turns out to be the beginning of the end for tens of thousands of small businesses, which rely on government power to survive. . This winter. “
Instead of a proposed load cap under the existing Energy Bill Relief Program (EBRS), the new program, which will last until March 31, 2024, offers a wholesale unit charge for energy.
Since the discount only comes into play when wholesale energy prices exceed a certain “minimum price”, business representatives considered it “negligible”.
For most businesses, the electricity discount will be set at £19. 61 per megawatt hour (MWh) with a “price threshold” of £302 per MWh.
For gas, the maximum rebate will be £6. 97 per MWh with a price threshold of £107 per MWh.
Companies with energy prices below those grades will get support.
Martin McTague, national chairman of the FSB, said: “For those who are struggling, the reduction presented through the new edition of the programme is not significant. Many small businesses could not possibly do so with the few cents provided through the new edition of the program. “
He added: “It’s so disconnected from reality. Two pence per kWh of electric power and part of a penny for fuel is absolutely negligible for small businesses, even if it costs taxpayers billions. “
On the other hand, companies that rely heavily on energy, such as glass, steel, and ceramic producers, will benefit from a larger reduction.
For electricity, it will be £89 per MWh with a price threshold of £185 per MWh and, for gas, £40 per MWh with a price threshold of £99 per MWh.
The existing EBRS, which caps the unit energy tariff, was introduced in October 2022 as a six-month transitional measure to protect businesses from skyrocketing energy tariffs.
The government said it had clarified that “these degrees of protection were limited in time” and “not finished to serve as a bridge for companies to adapt. “The existing plan will be finalized as planned on March 31, 2022.
Mr. McTague said, “The existing EBRS program provides certainty to small business homeowners about their rates and has made a difference in the survival of many small businesses. The replacement program will do neither.
The announcement of the new program comes on the heels of wholesale energy costs falling to degrees similar to those that existed before Russia’s invasion of Ukraine in February 2022, before sanctions on its fuel exports caused energy costs to skyrocket (see update below).
Wholesale fuel costs were felt in degrees before Russia’s invasion of Ukraine in February 2022 pushed them to record levels last year, according to figures from knowledge firm Refinitiv, writes Candiece Cyrus.
This has led customer teams to understand why household and business energy expenses remain at high levels and do not reflect adjustments in the wholesale market. According to industry figures, the cause of this is the practice of hedging, which consists of providers buying shares months in advance.
The war in Ukraine and the ensuing global sanctions on Russian fuel exports have caused energy expenses to skyrocket, prompting the UK government to introduce an Energy Price Guarantee (EPG) for domestic consumers in October 2022.
Until then, typical household expenses were restricted by the value limit set by industry regulator Ofgem. But when it became clear that the limit would exceed £3,500 a year for average expenditure, the government stepped in by introducing the EPG to cap average annual expenditure at £2,500.
Ofgem’s new limit, which came into force this month, amounts to £4,279 a year for the average household. However, the EPG will remain at £2,500 until April and then increase to £3,000 until March 2024.
The relief in wholesale prices is partly due to the EU buying larger quantities of liquefied natural gas (LNG) as an alternative to Russian gas imports from countries such as the United States and Qatar.
This, coupled with the fact that the UK and other European countries have scrambled to build up levels of stored fuel ahead of the winter months, has caused wholesale fuel prices to plummet.
Thanks to the temperatures of the last few weeks, the drop in fuel demand has led to a further drop in prices.
Yesterday, Refinitiv recorded the value of fuel purchased for delivery in the UK next month at €72. 40 per megawatt hour. When Russia invaded Ukraine on February 24, 2022, the price of fuel rose to €134. 31 per megawatt hour, peaking at €339. 19 per megawatt hour on August 26 last year.
Yuriy Onyshkiv, senior analyst at Refinitiv Gas Research, said: “An incredibly hot December even helped some countries resume garage injections for nearly two weeks in late December, an unprecedented progression for winter, when withdrawals predominate. “
“All of this has given confidence to the market and weighed on prices. “
Ofgem is asking suppliers to buy energy in bulk weeks and months in advance to ensure supply, so that existing retail costs reflect last autumn’s peak costs. The current decline in wholesale costs will not be reflected in household expenditures until the end of this year.
Today, analyst Cornwall Insight announced its latest energy price cap forecast from Ofgem, taking into account falling prices.
It expects the cap, which is adjusted quarterly, to fall to £3,545 a year, from £4,279 a year in April, but to drop to £2,800 a year in July. As a result, the EPG, which is due to increase to £3,000 per year in April, would be superfluous from July.
In October, Cornwall Insight predicts that the cap will rise to £2,835 for the year.
Financial firm Investec forecasts similar figures: £3,458 a year in April, £2,640 a year in July and £2,704 a year in October.
Octopus completed the acquisition of Bulb, the bankrupt powerhouse that was forced to take on special management in November 2021, writes Kevin Pratt.
The special management created through the government and the energy regulator, Ofgem, to protect consumers in the event of bankruptcy of a primary supplier such as Bulb. With 1. 7 million consumers, Bulb represents too great a burden for other electric corporations to absorb. in the midst of the energy crisis, in which some 30 suppliers closed their doors in 18 months.
Suppliers went bankrupt because wholesale energy prices were higher than their customers could qualify for due to Ofgem’s price cap, which was in place at the time.
The Bulb’s special administrative regime would have collected up to £4 billion, with the final bill being paid through taxpayers and a tax on energy bills.
In his visitor blog, Bulb says, “The sale of Bulb’s power supply business to Octopus Energy is now complete. Our members don’t have to do anything.
“When it’s time to make a transfer to Octopus, get new top points about your account. Octopus will send you all the main points on how to create an online account and download their app. Until then, your Bulb account number will remain the same, and you can continue to use your Bulb app and account.
“If you are a former member with a debit or credit balance on your account, your energy provider will be affected and that debit or credit balance will be transferred. “
More than 25,000 Utilita prepaid consumers are required to get £20 meter credits as payment for not receiving them when they first applied for them, writes Candiece Cyrus.
Regulator Ofgem requires energy companies to offer assistance to vulnerable customers, such as disabled people and the elderly, if they have no other way to raise their meter more sensibly.
Ofgem claims that Utilita did not take individual cases into account when deciding whether or not to grant further credit to consumers who were suffering from significantly increasing their prepaid meters.
The supplier will also donate £321,740 to the Energy Redress Fund, which supports energy consumers in situations.
Ofgem evaluated the assignments after reviewing recorded calls between Utilita workers and customers, as well as educational materials, procedures and company policies.
Cathryn Scott, Director of Compliance and Emerging Issues at Ofgem, said: “Around 4 million UK families currently rely on prepaid meters, and the current cost-of-living factor is putting pressure on many families, which in turn is causing more people to apply for more credit for more sensible people to increase their prepaid meters.
“While Utilita has acted to rectify those issues and agreed to compensate those affected, this action deserves to serve as a reminder to other providers to pass additional measures to ensure certain vulnerable teams get the help they need, especially during the colder winter months.
Anyone who receives a credit from their provider must repay it the next time they turn up their meter. If this is not possible, you deserve to be presented with a manageable repayment plan.
Industry regulator Ofgem has shown a £22. 2 billion investment programme over the years to make Britain’s electricity grid cheaper, cleaner and more reliable, writes Candiece Cyrus.
Infrastructure investments during the period from April 1, 2023 to March 31, 2028 will be made without network fees accruing on customer bills. Households will continue to pay £100 a year.
Rather than passing prices on to households, Ofgem expects the six companies that manage the UK’s electricity distribution networks (Electricity North West Limited, Northern Power Grid, National Grid Electricity Distribution, UK Power Netpaintingss, SP Energy Netpaintingss and Scottish and Southern Electricity Netpaintingss) to return and paint their investors to make their operations more efficient.
The regulator also hopes that corporations will use the investment to incentivise the UK to abandon its heavy reliance on imported fossil fuels, natural gas.
To this, the regulator said adjustments to the way energy is used and stored will be necessary to allow the use of greener resources such as wind, solar and wave energy.
Ofgem says that the advent of an efficient and greener grid will anticipate an increase in demand for electric power due to the increased number of heat pumps used in homes and the increase in the number of electric vehicles (EVs).
The sale of new petrol and diesel cars will be banned in the UK from 2030 until the end of the decade.
Ofgem said “smart” and virtual technologies will give consumers more control over their energy consumption, allowing them to take advantage of discounted off-peak price lists or avoid peak costs. Electricity costs will vary further to reflect fluctuations in climate-dependent renewable energy generation. .
Households will also be able to sell electricity to the grid in periods of low energy production, from resources such as electric vehicle batteries.
Akshay Kaul, Acting Director of Ofgem’s Source Infrastructure and Security Group, said: “The energy economy has changed, and cleaner, more local renewables such as wind and solar are less expensive than expensive imported gas. Combined with more nuclear and potentially hydrogen-powered renewable energy, these renewables will contribute to a low-carbon energy mix, better due to geopolitical events and energy price crises.
Gillian Cooper, head of energy policy at Citizens Advice, said: “Networks have been allowed to make top profits for far too long. In the midst of a cost-of-living crisis, Ofgem is right to challenge them to run as successfully as possible, which will help keep people’s expenses down.
“Today’s announcement shows some progress toward a higher cost for consumers. It also means that grids can be key to infrastructure so that there is capacity to connect electric vehicles, heat pumps and wind farms, helping to ensure the transition to net zero emissions.
“However, the benefits of the network will still be too high and the targets too easy. Ofgem may have gone further and cut at least £1. 5bn more on people’s bills.
The government is contributing £18 million to its domestic aid campaign to inspire others to save energy and reduce their bills, writes Candiece Cyrus.
The £18 million crusade includes energy-saving tips such as sealing windows and doors, reducing the temperature of a boiler’s water and turning off radiators in rooms not in use.
The government says the campaign will enable the UK to meet its target of reducing electricity consumption by 15% by 2030. It will also reach out to other vulnerable people, such as retirees and others with disabilities, offering advice on how to make them profitable safely. adjustments to your environment’s energy consumption this winter and beyond.
Grant Shapps, Business Secretary, said: “Our new public data crusade will give others the equipment they need to consume energy while staying warm this winter. “
Gillian Cooper, Director of Energy Policy at Citizens Advice, said: “People want transparent and consistent recommendations on how to reduce their energy consumption safely. We look forward to seeing how the government will make sure everyone has the data they want to do so.
“But this is only part of the solution to the monetary pressures that other people face. Some of the other people we help make desperate decisions to reduce their expenses, such as turning off the heat despite a health factor that requires them to stay warm.
“An energy-saving crusade will have to be accompanied by monetary continuation for those at the height of this crisis. “
Congressman Grant Shapps, the business secretary, has written to electric corporations to warn them not to overdo the fees charged to consumers’ direct debits, writes Candiece Cyrus.
In the letter sent over the weekend, Shapps said: “It is imperative that consumers are able to manage their spending effectively, and direct debit can be an effective way for households to reduce their energy prices throughout the year.
“It’s in everyone’s interest that when consumers take moderate steps to reduce their own bills, such as lowering their boiler flow temperature or making their homes more energy efficient, they can see an effect on their bills.
“I urgently need all vendors to find a way to make their systems more responsive to those positive adjustments in customer behavior and I have asked Ofgem to inform me on how to do that.
“As additional costs for households increase, it’s critical that we do what we can with them. I’m curious to see how they plan to make sure their direct debit formula doesn’t overdo the fees.
Although direct debit is the cheapest way to pay energy bills, providers would possibly overestimate the rates as they are based on an estimate of a household’s consumption over a year.
Energy consumers provide their suppliers with energy readings on a regular basis to ensure that their expenditures reflect the fuel and electrical energy they use.
Industry regulator Ofgem looked at how providers were adjusting customer direct debits earlier this year and found that 17 giant corporations had “moderate to severe weaknesses” in their processes. See the July 13 update below.
Ofgem said it was working with businesses to carry out procedures and reconsider direct customer debits if necessary.
Energy consumers can challenge their supplier if they accumulate their direct debit. They will have to request the readings of the meters used and verify that they are the same as those that appear on their invoices. They will be able to claim a refund of amounts owed if they have been overcharged, through a refund, a reduced direct debit or in the form of a credit to their account.
The government is launching a £1 billion scheme to fund the insulation of homes in the least energy-efficient homes, which is expected to save other eligible people up to £310 a year in energy costs, writes Candiece Cyrus.
The ECO program, which will run from spring 2023 to March 2026, will target households with an Energy Performance Certificate (EPC) score of D or less, and those in the lowest housing tax brackets, up to and adding Band D.
This includes families who do not gain access to the government under existing programs, such as ECO/ECO4, which provides subsidies only to those living in low-income social housing, are in energy poverty, and want assistance with energy efficiency projects. households.
Twenty percent of the investment will also go to the most vulnerable energy consumers, such as those receiving means-tested subsidies and those in energy poverty.
EPCs show the energy output of a building, a score ranging from A (highly efficient) to G (inefficient). Energy consumers are considered fuel-deficient if their home has an EPC score of D or lower and their residual source of income falls. below the official poverty line once they pay to heat their home.
Jeremy Hunt, Chancellor of the Exchequer, said: “In the long term, we want to make Britain more energy independent by generating cleaner local energy, but we also want more efficient homes and buildings.
“Our new ECO programme will help thousands of people across the UK better insulate their homes to reduce consumption, with the added benefit of saving families many euros a year. “
Industry regulator Ofgem has introduced a package of reforms aimed at reducing the threat of energy suppliers going bankrupt in volatile market conditions, writes Candiece Cyrus.
Ofgem wants to protect energy consumers by ensuring the financial stability of companies. It sets a minimum amount of money that suppliers will have to keep in the bank to better deal with market crises.
Thirty energy suppliers have gone bankrupt since the start of the current energy market crisis in August 2021, caused by a drop in wholesale energy prices. This has forced Ofgem to move millions of consumers into new businesses, costing taxpayers, according to estimates by the National Audit Office. (NAO), which will amount to £2. 7 billion.
The largest bankrupt provider, Bulb, was placed under special management in November 2021 because no other company was willing or able to serve its 1. 7 million customers.
After lengthy negotiations, it agreed that Bulb consumers would now be transferred to energy provider Octopus (see October 29 update). The cost of the special management has been estimated at £3 billion, and payers would foot the bill.
To prevent further business bankruptcies, Ofgem tightened restrictions on how suppliers can use customer credit balances after finding that some companies had used cash from accounts receivable to fund their business operations.
Jonathan Brearley, chief executive of Ofgem, said this summer that visitors’ balances “are used through a kind of interest-free business credit card. “
The regulator will also allow money intended to be spent through renewable energy suppliers to be set aside for this purpose.
Brearley said: “The energy crisis has had a profound effect on the sector, its business models, our regulatory strategy and the way we think about risk.
“These proposals will provide protections, checks and balances for consumers, suppliers and the industry at large to create a safer marketplace. We need providers to be forward-thinking and dynamic, while ensuring their monetary stability and that customers’ cash is protected. .
Gillian Cooper, director of energy policy at Citizens Advice, said: “Ofgem will have to ensure that other people never again suffer the chaos and prices of multi-supplier bankruptcy.
“It is imperative that these proposals lead to concrete adjustments that customers feel. The only way to do that is to put those new rules into effect.
Consumers do not interpret today’s announcement of a sharp increase in Ofgem’s energy value limit as an indication that their expenses will increase.
The electricity regulator has shown that its limit will be set at £4,279 for 3 months from 1 January 2023 for an average family with income that pays by direct debit. The current figure is £3,549.
Spending, however, will continue to be constrained by the government’s energy value guarantee, which came into effect on Oct. 1.
This limits the average annual household bill to £2,500 for the period up to March 31, 2023. Ofgem says: “The energy value peak indicates how much consumers would pay with their supplier’s base tariff if the value guarantee were in place. “
He added: “There is no immediate action we should take as a result of today’s announcement. “
The cap is calculated with reference to wholesale energy costs and reflects the amount corporations pay to secure their supply. The amount of the cap determines how much the government will have to contribute to reduce spending to an average of £2,500.
From 1 April, the guaranteed price will be set at £3,000 a year for average consumer households, regardless of the price cap in place at the time. Ofgem will announce the figure on February 27.
Under existing plans, the government will withdraw its value guarantee on March 31, 2024.
The price guarantee does not limit expenses. It limits the amount that can be charged per unit of fuel and electric power and sets the constant rate for each percent. Actual expenses will be determined by the amount of energy used.
Industry regulator Ofgem needs UK electricity corporations to do more for “vulnerable” consumers, such as those who have reached retirement age and those who are disabled, pregnant or living with an intellectual fitness condition, writes Candiece Cyrus.
Their most recent study found that five energy providers — Good Energy, Outfox, SO Energy, TruEnergy, and Utilita — fared the worst when it came to how they identify vulnerable consumers and whether to include them in the Priority Services Registry, which provides more information. consumers who want it.
Five Corporations – E (Gas
Energy consumers will be treated as vulnerable through their suppliers if:
Customers registered on the Priority Services Registry can get assistance, such as loose fuel protection checks. If they’re having trouble seeing it, your provider can send your account details and bills in giant print or Braille. If they use a prepaid meter, your provider can ensure that it is safely accessible.
Customers can check exactly what is available by contacting their provider.
Ofgem has also learned about clever practices by some companies, such as providing their consumers with monetary subsidies to pay their energy bills. Many corporations have also signed up to Energy UK’s Vulnerability Pledge, which points to the source of help in this area.
Neil Lawrence from Ofgem said: “We welcome the cooperation from suppliers and the steps taken so far, and while we see a lot of practice in some parts of the industry, we can see that there is still a lot of work to be done.
“It’s going to be a very challenging winter for everyone and customers want to be sure they’re getting the support they want. My message to suppliers today is simple: be proactive. Help your consumers know what’s available and then supply it.
Gillian Cooper, director of energy policy at Citizens Advice, said: “Given the enormous pressures facing other people this winter, energy providers deserve to do everything in their power to identify consumers who are struggling. “
“Citizens Advice sees day in and day out the heartbreaking consequences when this fails. People are reducing their consumption of food and basic items to cover their energy debts and living in cold, dark homes when they simply don’t have money left to recharge their meters. .
“Ofgem is right to hold electricity corporations accountable; It will now have to ensure that this review leads to concrete action. “
Households and businesses with smart meters could be rewarded with discounts on their spending this winter if they reduce their electricity use at peak times, according to a plan unveiled today in England, Scotland and Wales, writes Candiece Cyrus.
The flexibility service call, designed through the National Grid Oconsistent Electricity System (ESO) and approved by regulator Ofgem, will offer discounts of up to £100 for households, £3 per kilowatt hour and more for businesses.
Energy consumers will want to be with a supplier. Octopus, which last weekend took over the visitor base of the bankrupt company Bulb (see article below), has already shown that it will run the system, having tested it earlier this year.
Others have turned to ESO to offer the service to their customers.
Businesses will want to monitor electrical energy consumption in real-time, meaning only energy consumers with smart meters that can provide readings every fraction of an hour will participate.
The program will begin with a 12-day “trial” between November 3 and March 31, 2022. Participants will get two hours of performance in their electrical energy consumption for one hour between four p. m. and 7 p. m. de Monday through Friday.
Customers who replenish their use, for example through their washing machine or dishwasher at chosen times, will get a discount.
ESO will pay the energy providers providing the service a minimum of £3 for every kilowatt-hour (kWh) during the trial periods. It’s up to each company to decide how much of the money it will use to incentivize its consumers and how the relief will impact them.
Fintan Slye, ESO’s Chief Executive, said: “We are very pleased that Ofgem has approved the use of our Demand Flexibility service this winter. This will mitigate the potential hazards defined through ESO’s Winter Outlook and allow consumers to see a monetary benefit set back by reducing their electricity consumption at peak times.
The release of the programme follows a warning from ESO last month that it would possibly have to impose force cuts if the demand for force exceeds the source this winter as the global strength crisis continues.
ESO is looking at how to scale up the formula to feed consumers who don’t have smart meters.
Cyrus writes that concern is growing about the large number of consumers of classic prepaid meters who have not yet redeemed their first voucher to pay energy prices under the government’s energy bill program.
The scheme offers a £400 reduction on all household electricity expenses between October 2022 and March 2023. For those who own outdated prepaid meters, this is all about redeeming vouchers when reloading cards or keys.
Clients have already earned their October bonuses. Customers who haven’t won it yet touch their energy provider.
In a report for the BBC, payments service PayPoint says it plans to redeem vouchers worth £52. 8 million this month. However, it has only repaid £27 million.
The government is urging energy consumers to use their vouchers as they are valid for 90 days.
Recipients will receive a £66 momentary voucher in November and a £67 monthly voucher between December and March.
Depending on their electricity company, consumers of classic prepaid meters deserve to get a bonus in the form of a voucher by post, SMS or email, or in the form of an automatic credit when recharging. Vouchers can be redeemed at post offices or at the 28,000 points of sale offering PayPoint services across the UK.
According to industry regulator Ofgem, four million households use a prepaid meter and some of those households use old meters without smart technology.
Customers who have a smart meter deserve to be automatically credited with their entitlement.
Households that pay their electricity in arrears through constant monthly direct debit expect their initial bills to be deducted from their bills or to be reimbursed for cash once the bill is paid.
Those who earn monthly or quarterly expenses based on their energy usage will see the monthly payment as a deduction from their bill or as a credit to their balance.
While electric utilities can steer their consumers toward prepaid meters when they’re struggling to pay their bills, those solutions tend to be more expensive than paying for overdue energy via direct debit.
Citizens Advice announced last month that the number of people who received help from the charity because they had been transferred to a prepaid meter had increased by 138% in the last two years.
It predicts that prepaid consumers could spend £258 more on energy than direct debit consumers this winter.
Users of Bulb, the power company that received special control through electricity market regulator Ofgem in November 2021, will migrate to Octopus, a government-approved deal entered into in the last 24 hours.
The 1. 5 million consumers affected do not want to take any action and the procedure must not involve any interruption in its source or in the management of its accounts. All terms and situations of credit rates and balances will remain the same, and consumers will have to continue to invoice in the same way they do now.
Bulb customers are kindly requested not to change companies at least until the industry move ends in November. The vast majority of energy consumers across the country currently benefit from their provider’s popular variable rate offers, with no less expensive offers available.
Octopus, which has an excellent reputation for visitor service, will continue to use Bulb’s technology and logo in an era of transition to ensure graceful movement for Bulb visitors.
The deal is the culmination of a competitive sale procedure conducted through special administrators, Teneo. They were appointed to run the company because, at this time last year, no other powerful company wanted or could make do with such a gigantic visitor base, given the charge of supplying their power below Ofgem’s then-prevailing maximum value limit.
Grant Shapps, the new business secretary, said: “This is a fresh start and means that Bulb’s 1. 5 million consumers can rest easy knowing they have a new potency with Octopus. “
Greg Jackson, CEO and founder of Octopus Energy Group, said: “We [Octopus and Bulb] are rivals, but we share the same mission: to drive a greener, less expensive energy formula with other people in mind. We know how vital this is. ” To Bulb’s unwavering consumers and committed staff, and we are committed to ensuring Octopus can provide them with a strong home for the future. “
Bulb consumers can learn more about this offer and what it means for them on the Bulbs blog and in regular updates on next steps on the Octopus Energy data page.
British Gas owner Centrica announced that it has reopened its natural gas garage facilities in time for winter, when energy demand in the UK increases, writes Candiece Cyrus.
Surplus plant fuel will be injected into the facility when prices are low and then used in periods of increased demand, such as the upcoming colder months, which the company says will help stabilize or reduce energy bills. Centrica resumed its raw operations after five years, following technical upgrades over the summer.
The facility, which is a fuel box in the North Sea 20 miles off the coast of Easington, Yorkshire, shut down in 2017 after problems were discovered in several of the 30 wells used to inject and extract fuel.
Although the paints done so far at Rough will only allow it to operate at 20% of its previous capacity this winter, this is enough to make it the largest fuel reserve in the UK, expanding the UK’s fuel storage volume by 50%.
It can store up to 30 billion cubic feet of fuel, which can then be distributed through the UK’s fuel network to households and businesses.
Chris O’Shea, CEO of Centrica, said: “I’m very pleased that we’ve returned the Rough to garage operations this winter after a really extensive investment in technical modifications.
“In the short term, we, the Duros, can support our energy formula by storing vegetable fuel when there is a surplus and generating that fuel when the country wants it during cold crises and demand peaks. Crude oil is not a silver bullet for energy security, it is still a key component of a variety of measures that can be taken to help the UK this winter.
National Grid warned earlier this month that power shortages would be the worst-case scenario, if power demand exceeds this winter, due to the ongoing global strength crisis. See the October 6 update.
According to the North Sea Transitional Authority, the UK has, on some days, some of the lowest fuel reserves in Europe. Germany’s reserves are 89 days, France’s 103 days and the Netherlands 123 days.
Returning to crude oil is a strategy used in the UK to try to improve energy security. Earlier this month, the UK government issued more than a hundred licenses for oil and fuel extraction in the North Sea. Critics say the move is not in line with global warming goals.
O’Shea said Centrica’s long-term purpose for reopening the Rough plant is to “deliver net-zero electricity by 2035, decarbonise UK shopping hubs such as the Humber region by 2040, and the UK economy by installing a net energy exporter. Again.
Prime Minister Rishi Sunak announced at Prime Minister’s Questions this week that he would not lift the ban on fracking, the questionable approach of extracting fuel from shale rocks in the ground, proposed through his predecessor, Liz Truss, in September.
He has shown that he will not attend the COP27 weather summit in Egypt next month.
New Chancellor Jeremy Hunt’s speech today on the government’s economic strategy includes an explosive announcement that the Energy Price Guarantee (EPG) will only work as originally planned until April 2023.
As detailed in the stories below, the EPG limits the rate that suppliers can replace according to the unit of energy and related ongoing costs, putting the annual expenses of a family with average consumption at around £2,500. It is scheduled to run until October. 2024.
It is feared that the average energy bill for families not receiving government services will exceed £4,300 in April.
Hunt also notified the Energy Bill Relief Plan, which supplies businesses and public institutions by reducing the wholesale price they can be charged. It will run as planned until April 2023, but any extension will now be subject to careful scrutiny.
Both plans will now be subject to Treasury-led scrutiny, and today it is claimed that the prime minister and chancellor agreed that it would be irresponsible for the government to continue to expose public finances to the unlimited volatility of foreign fuel prices.
In introducing the review, Mr Hunt said the aim was to come up with a new technique that would charge taxpayers far less than expected while ensuring enough for those who want it. He added that companies will focus on those most affected and that the new strategy will further inspire energy efficiency.
Mr Hunt mentioned the Energy Bill Support Scheme, which will reduce all household electricity costs by £400 by March. This is supposed to continue unchanged.
The Chancellor cancelled all the measures contained in the 23 September mini-budget of his predecessor, Kwasi Kwarteng, in favour of those that had already been implemented, namely adjustments to the stamp duty regime in England and Northern Ireland and the reduction of social security contributions. month.
This means that the £400 relief scheme, which will reduce electricity costs by £66/£67 each month for six months, will remain intact.
The Energy Pricing Bill, which provides a legal basis for the government’s energy value guarantee and related measures introduced on October 1, was introduced to Parliament today with new proposals to limit the amount of profits that can be generated through low-carbon electric power generators. Candiece writes. Cyrus.
The cost-plus-benefit cap will limit the amount that can be obtained through electric power turbines that use renewable and nuclear energy. The government is consulting on the main points of the plan ahead of its arrival in England and Wales next year.
Currently, wholesale energy prices are based on the highest producer price, i. e. natural gas, the value of which has increased due to the war in Ukraine. It should be noted that all electric power manufacturers benefit from this advantageous tariff. even if they use a less expensive energy source.
This means that families do not benefit from the lower rate of electric power generation from renewables and nuclear. The government intends to break the link between the use of vegetable fuels in electric power generation and the value of electric power generated by other means.
In his research on the bill, energy market analyst Cornwall Insights said of the cap: “The plan will be implemented for any excess profit that renewable energy turbines make and will still allow them to hedge their prices and gain an adequate source of profit reflecting their operational output. Matrix investment commitment and threat profile.
The government has refuted claims that the formula would be a providential tax on energy producers, arguing that it is a tax on excess revenue, on all revenue generated through businesses.
Introducing the bill in Parliament, Business Secretary Jacob Rees-Mogg said: “UK businesses and consumers pay a fair price for energy. Faced with rising prices caused by Putin’s horrific invasion of Ukraine, the government is taking swift and decisive action. “
Under the Energy Price Guarantee, annual energy costs for families with admission qualifications will be around £2,500.
Without intervention, unit energy prices under trade regulator Ofgem’s value cap are expected to reach just around £3,550 this month, £5,400 in January next year and even more in April.
The new bill also lends legal prestige to the Energy Bill Support Scheme, which provides £400 to eligible families to help them pay for energy during the winter, as well as the Energy Bill Relief for Business programme.
It also covers government policies for families who are not connected to the fuel grid and use selective energy bureaucracy, and ensures that landlords who take advantage of it will be fined if they overrate their tenants for energy.
Energy providers Octopus Energy and OVO will pay their consumers for their energy consumption this winter, writes Candiece Cyrus.
Octopus Energy has designed a program that will praise consumers for reducing their consumption in specific two-hour time slots.
Only its 1. 4 million smart meter consumers and about 5,000 of its commercial consumers with meters that can send normal readings will participate.
OVO will praise its consumers who use smart meters for their higher energy consumption during off-peak hours, between 16:00 and 19:00.
Octopus and OVO are among the energy providers that plan to work with National Grid to solve the potential challenge of energy demand to outperform the source in the colder months.
Last week, National Grid warned that planned power cuts could be necessary in a worst-case scenario, for example if Europe’s force imports to the UK are threatened due to the global force crisis. See updates below.
The task will also stimulate the use of energy from renewable resources by encouraging consumers to replace their consumption during off-peak hours. During peak periods, renewable energy resources are depleted, meaning more fossil fuel energy is shared across the grid.
Octopus Energy’s program, Saving Sessions, will begin next month and run through March 2023.
The supplier tested the formula between February and March of this year with more than 100,000 consumers who were contacted in advance to tell them two-hour slots they deserved to restrict their energy consumption, as energy demand was high.
On average, visitors reduced their energy consumption by 0. 7 kilowatt-hours (kWh) for every two hours per day. This saved them an average of 23p of time. Some consumers with expensive fixed tariffs saved up to £4. 35 of time.
However, this winter, the company says National Grid is likely to pay between £3 and £6 per kWh of reduced consumption, with the average visitor being rewarded with £4 per kWh. Customers are likely to be paid more. On days when the network is at its most extensive.
Greg Jackson, chief executive of Octopus, said: “Rather than isolating swaths of the country if we run out of gas, we can praise other people who use less energy during call spikes during periods.
“This way we can make blackouts a thing of the past and prices for everyone. “
While OVO and other energy providers are in talks with National Grid to offer similar schemes, OVO will launch a separate trial program, Power Move, aimed at saving its consumers money and greener energy.
The program, which will run from Nov. 1 to March 31, 2023, will allow consumers who use smart meters, which can demonstrate their energy usage in real time, to use more energy between four p. m. This is the time when an average family typically uses 19% of the total amount of energy they consume over the course of a day.
OVO will ask consumers participating in the program to reduce their average consumption of those hours to less than 12. 5% to help them use more renewable energy.
For an average family, this may require three washes per week during off-peak hours. Each family that reaches the target each month will be rewarded with an average of £20.
OVO will contact consumers to apply for the program in mid-October.
Octopus Energy smart meter consumers can do so online in their Savings Sessions program.
The Energy Networks Association, which represents companies operating the UK’s electricity and fuel infrastructure, has provided more details on how the country is coping with mandatory cuts this winter.
There would be no blackout exemption for families who rely on electric power for their medical equipment. In such cases, individuals are asked to have sufficiently good support services and to contact their healthcare provider for additional facts and advice.
National Grid, which has overall responsibility for fuel and power source, warned earlier this week that coordinated and controlled national blackouts could be necessary, in addition to random blackouts if energy demand exceeds the source (see article below).
No cuts are planned at the moment, but National Grid has assessed what measures will be needed in the worst-case scenario caused by the lack of energy imported from Europe to the UK due to the foreign energy crisis.
Planning discounts ahead of time and notifying others ahead of time means the source can be targeted to those who want it most. If an emergency power outage is implemented, consumers in some locations will usually be without power for about 3 hours a day. emergency.
The Network Association says “protected sites,” such as air traffic centers and giant hospitals with twists of fate and emergency departments, would be exempt from planned power outages in the event of an emergency.
Importantly, residential consumers would not be exempt. This would mean that consumers who medically rely on electrical power to force their appliances would have to rely on the backup force resources they already have in the event of a power outage.
Customers who require a continuous supply of electrical power for medical reasons and who require medical assistance in the event of a forced outage are requested to seek the recommendation of their local fitness service provider.
If the resolution is made to implement emergency force cuts, public data statements will be made and consumers will need to find out if and how they are affected on this online page, www. forcecut105. com, by entering their zip code.
National Grid remains confident that there will be a good enough source of electrical power during the winter without wanting to introduce power outages. As detailed below, it introduces the Demand Flexibility Service to incentivize families and businesses to reduce their electricity consumption between peaks. From 4:00 p. m. to 9:00 p. m.
From November 1, the scheme, which will run through energy providers, may allow families with smart meters to pay up to £10 per day for the use of appliances at off-peak hours.
Fears of power outages this winter have prompted National Grid to expand a program that will praise energy consumers for reducing their consumption if the grid infrastructure provider finds that the gap between demand and available source is narrowing.
The flexibility service call, which will start on November 1 and run until March 2023, was designed through National Grid in collaboration with energy providers, market regulator Ofgem and the government.
Energy-intensive industries are the main target of this service; Providers would likely be offering “uptime” incentives to families who, for example, are engaged in using appliances such as washers and dryers outdoors during peak usage periods.
Participants will need smart electric meters that allow accurate, real-time tracking of their consumption patterns. Reports suggest that taking advantage of the full benefit of the scheme could be worth just £10 a day.
Providers are encouraged to get their consumers fully engaged in the program as soon as it launches.
National Grid says that, without the proposed discounts on peak consumption, cold days with little wind to power wind turbines may simply lead to the need to “disrupt supply to some consumers for limited periods of time, in a controlled and controlled manner. “
It argues that power cuts would be inevitable if the UK’s source of electricity and vegetable fuel from Europe were to be discontinued: “This would mean that some consumers could be left without electricity for predefined periods of time over the course of a day; It’s supposed to last 3 hours. Blocks of hours.
“This would be to ensure the overall protection and integrity of the electric power formula across Britain. All feasible mitigation methods would be implemented to minimize disruptions.
Providers would be guilty of identifying “vulnerable” customers, such as those who rely on electrical medical equipment. However, only key infrastructure points, such as air traffic hubs and emergency and destination turning facilities, would benefit from uninterrupted supply.
Increased use of coal-fired power plants is also planned to secure supply.
The root cause of the challenge is the shock in Ukraine and what National Grid calls “unprecedented turmoil and volatility in energy markets in Europe and beyond and fuel shortages in continental Europe. “
According to the report, such measures may have a variety of consequences in Britain, adding force cuts, and wholesale costs will remain at record levels for the foreseeable future.
Today, October 1, marks the first day of the government’s Energy Price Guarantee, the replacement of the controlled value limit through Ofgem, the market regulator, since its inception in 2019.
The Guarantee limits the amount suppliers can charge per unit of fuel and electrical energy used by a family in the UK, as well as the constant value of the fuel. It will be in effect for two years.
Importantly, it doesn’t restrict the amount of the expenses themselves. The amount owed to suppliers will be decided by the amount used.
The £2,500 annual figure associated with the Guarantee is the amount of a typical annual bill for a household with ‘average’ consumption over a year: 12,000 kWh of fuel and 2,900 kWh of electricity.
Ofgem’s average cap spending, if it had come into effect today, would have risen to almost £3,550 before jumping back to around £5,400 in January and even more in April.
The increase in expenses is attributed to the sharp increase in the value of vegetable fuel in wholesale markets, which in turn is attributed to Russia’s disruption of material shipments to the West as a result of the war in Ukraine.
While the guarantee will generate very significant savings on Ofgem’s reduced limit, it will still generate higher costs than the limit that ended on September 30. This puts the average annual expenses at £1,971.
According to Citizens Advice, debt problems could lead energy providers to move more than 450,000 consumers to prepaid meters this winter.
The charity says the 4 million families with prepaid meters are likely to spend £258 more in the coming months compared to those with credit meters who pay in arrears by direct debit, cheque or cash.
As was the case with the past value limit, under the Energy Price Guarantee, consumers of prepaid meters will pay a higher unit value than those with credit meters.
All families will also benefit from a one-off £400 reduction in their electricity bills, implemented during the months of October 2022 to March 2023.
This will reduce the bill to £2100.
Those connected to the fuel grid will get £100 for the charge of the fuel they use as an alternative.
You can locate the full main points of the Energy Price Guarantee, as well as a history of Ofgem’s unfortunate cap, in this Q&A and in the policy below.
The government is expanding its advertising to power users through the Energy Bill Support Program; Again, the main points can be discovered below.
Energy companies are questioning how they treat vulnerable consumers and those struggling to pay their expenses following the publication of a study by regulator Ofgem.
It’s about identifying those struggling, offering more help, and conducting more checks to make reimbursement systems realistic for customers, Cyrus writes.
Ofgem found that TruEnergy, Utilita and ScottishPower have “serious weaknesses” in the way they treat consumers with payment difficulties.
Its most recent market compliance review found that five other corporations (E, Good, Green Energy, Outfoxthe Market, and Bulb) were experiencing issues in supplying consumers who are struggling to pay their bills.
Eight suppliers (Ecotricity, EDF, E. ON, Octopus, OVO, Shell, Utility Warehouse and So Energy/ESB Energy) have “minor” problems.
Only British Gas “has no problems”. Utilita and ScottishPower get implementation notices, not easy “specific and urgent actions. “
In July, Ofgem issued TruEnergy an interim order requiring it to take steps to ensure that its pre-authorised debit policy and processes are compatible with the target and that direct visitor debits are set at the correct level. No action adicional. la company has been opposed at this time.
Ofgem’s most recent market research found that, across the industry, issues ranged from poor education on how to identify vulnerable consumers (those of retirement age or with disabilities, for example) to a lack of clarity on how payment plans are re-evaluated if payment plans are re-evaluated. A customer’s scenario changes.
The regulator has sent practical data to all energy suppliers, accompanied by a letter outlining its expectations, including:
Jonathan Brearley, Chief Executive of Ofgem, said: “We looked at how suppliers are helping consumers who are struggling to pay their bills, i. e. those who are vulnerable, and found that some suppliers did not meet the criteria that Ofgem expected.
“We accept that there will be a lot of pressure on utilities in the market this winter, but the wishes of vulnerable consumers will have to be among their most sensible priorities. We will now work with companies to identify areas where they can improve. .
Dame Clare Moriarty, chief executive of Citizens Advice, said: “Today’s review reinforces what struggling consumers already know: some electricity corporations are not up to the task. This is absolutely unacceptable given the enormous pressures other people face due to the cost of living.
“Providers want to up their game and Ofgem wants to hold them accountable. With a difficult winter ahead, we also want to ban backdoor disconnection tactics, such as pushing other people with debt to prepaid meters. “
Data from Citizens Advice has revealed that more and more consumers are not being able to sensibly increase their prepaid meter this year compared to the last three years combined.
The charity’s Market Meltdown report found that the number of Ofgem workers turning to consumers for poor supplier practices fell by 25% between 2017/18 and 2020/21, despite there being a record number of electricity corporations in the market at the time.
From 1 October, the government will freeze energy costs at £2,500 a year for the next two years, for the average family, and additional families will receive £400 relief on their electricity bill between October and March 2023.
Low-income families would possibly also be eligible for cost-of-living subsidies.
Ofgem’s next marketplace on visitor vulnerability will be published later this year.
The U. K. government lifted the 2019 moratorium on hydraulic fracturing, a debatable approach to extracting shale fuel from deep underground.
The move was announced through the Prime Minister when she unveiled the Energy Price Guarantee in the House of Commons on 8 September. Since then, details of the confirmation have been delayed during Queen Elizabeth’s mourning period.
Despite considerations linking fracking to earthquakes, the strategy banned in the past will be allowed to resume following an announcement through the Department of Commerce, Energy and Industrial Strategy (BEIS).
The department says the end of the moratorium will help the UK’s energy security in light of the crisis in Ukraine, which has pushed up prices on wholesale markets.
Jacob Rees-Mogg, Secretary of State for Foreign Affairs, MP, said: “In the face of Putin’s illegal invasion of Ukraine and the militarisation of power, strengthening our energy security is a very sensible priority and, as the Prime Minister has said, we must be willing for the UK to be a net exporter of energy until 2040.
“To get there, we’re going to have to explore all available avenues through solar, wind, oil and fuel production, so it’s only logical that we’ve lifted the pause [on fracking] to take advantage of all the possibilities domestic fuel resources. “
Hydraulic fracturing involves drilling into the earth before injecting a high-pressure aggregate of water, sand, and chemicals into the rock to obtain shale gas.
The strategy made headlines when the founder of Cuadrilla, the UK’s first hydraulic fracturing company, said British geology made fracking highly unlikely on any practical scale.
The clinical consensus on the dangers related to hydraulic fracturing has remained unchanged since the moratorium imposed in 2019.
Companies with hydraulic fracturing licenses will have to suspend operations if they encounter tremors of magnitude greater than 0. 5. Earthquakes can be felt with magnitudes greater than 2. 0.
Danny Gross, an activist with Friends of the Earth, says fracking endangers communities and would have a negligible impact on household energy bills.
He said: “Repeal regulations that say other fracking people would send shockwaves through local communities.
“This announcement suggests that the government is ruining communities by forcing them to settle for ‘a higher degree of threat and disruption. ‘
The government has said that fracking activities will have to get local support. Developers will want to have the required licenses and permits in place before they can begin operations.
Business Secretary Jacob Rees-Mogg today provided more key takeaways on the government’s six-month plan for all UK businesses, charities and public sector organisations such as schools and hospitals that are suffering with ever-rising energy bills.
The energy bill relief plan will reduce the wholesale value of fuel and electric power for all non-household customers. It will be equivalent to the Energy Price Guarantee (EPG) for domestic consumers announced on September 8 by Prime Minister Liz Truss (see story below). ).
The new measures will apply to ongoing advertising contracts entered into from 1 April 2022, as well as to existing predetermined, variable and flexible price lists and contracts. No action is required on the part of bill payers to take advantage of the settlement. .
The corporate energy market has operated without the price cap introduced in the domestic market in 2019 and which will be replaced by the EPG on October 1, 2022.
The corporate energy billing formula will also apply to energy consumption from October 1, 2022 and will continue until March 31, 2023. The government says businesses will see relief in their October bills, which are earned in November.
As with the national EPG, the government will apply a price reduction based on the kilowatt-hour (kWh) of fuel and electricity powered by companies.
To this end, it has set a sustained wholesale price that is expected to be £211 per megawatt hour (MWh) for electric power and £75 per MWh for fuel (the value will be known on September 30). at kWh equivalent values of 21. 1 pence for electricity and 7. 5 pence for fuel. Invoices would also include the supplier’s current fees, as is currently the case.
The government says the sustained value will be less than the share of wholesale values expected for this winter. Part of the investment for the plan will come from the abolition of green taxes that are ultimately paid through non-residential customers.
From October, green taxes were also removed from household energy expenditures. The taxes will be temporarily financed by general taxes.
Reflecting the complexity of the domestic electricity market, the point of value relief for the corporate/charitable/public sector framework will vary depending on the type of contract and the circumstances:
The six-month program will be reviewed after three months to determine if specific targets merit being offered to certain non-domestic customers after March 2023. The government’s internal program is expected to run for two years starting Oct. 1, 2022.
The hospitality industry has clearly pointed out the likelihood that pubs, nightclubs, and restaurants will close if no information is provided.
Kate Nicholls, head of the UK’s hospitality industry body, welcomed the announcement but said it would be needed beyond the six months of the new plan: “We will continue to work with the government to make sure there is no cliff when those measures fall. “
Rees-Mogg said the government would also focus on improving the UK’s energy self-sufficiency: “The steps we take to increase the amount of domestic energy we produce will fuel security and generate growth, protect jobs and help UK families with their burden of living this winter.
Other important points have been revealed about the government’s Energy Price Guarantee (EPG), announced through the Prime Minister on 8 September as a way to restrict the average annual household bill to £2,500 for two years from 1 October.
On the same day that it provided the main points of its plan to ease energy costs for non-household consumers (see story above), the Department for Business, Energy and Industrial Strategy showed that the equivalent of fuel and electricity costs would be provided to families in Northern Ireland.
Northern Ireland’s energy market is structured differently from the rest of the UK, and officials have used the time since the initial announcement to figure out how to implement the measures.
The relief in the unit value of fuel and electricity in Northern Ireland will come into effect from November, but the government will roll back October spending to November spending. No action is required to obtain the array.
All UK families, adding Northern Ireland, will also benefit from a £400 reduction in spending in the six months between October 2022 and March 2023, bringing the average bill down to £2100 for 2022/23.
The scope of this relief will be extended to the citizens of the park’s homes and tenants whose landlords pay for their energy through an advertising contract. The government will introduce a law for landlords to pass on the reduction to tenants who pay all-inclusive bills.
An additional payment of £100 will also be made to more than one million UK families who are connected to the fuel grid and use select fuels such as heating oil, the value of which has also risen in recent months.
In her speech to the House of Commons last week, Prime Minister Liz Truss announced a package of measures for families and businesses facing overwhelming increases in their energy bills.
He also said the UK would achieve its energy self-sufficiency through increased use of nuclear power, increased extraction of oil and fuel from the North Sea, an end to the moratorium on fracking, and continued investment in renewables such as hydrogen, solar and wind.
Key issues of radical government intervention in the energy market include:
The Prime Minister did not provide important details on how the various measures will be financed; the Chancellor said last week that there would inevitably be an increase in government borrowing in the short term. Any prospect of a providential tax on the profits of energy producers has been governed through Mrs Truss.
The chancellor is expected to provide more important points when he draws up a monetary budget (actually a mini-budget) later this month.
Prime Minister Liz Truss has ruled out a providential tax on energy manufacturers as a way to help fund the billions of pounds of freezing energy bills. Details of how the government will tackle the energy affordability crisis will be announced through Ms Truss.
Asked today about the use of a providence tax as a revenue-generating mechanism, he said the UK “cannot tax its way to growth”, arguing that higher taxes on companies have a chilling effect on foreign investment.
This means that the funding for the measures to be announced will have to come from a tax on energy expenditure for the next few years or from general taxes.
Former chancellor Rishi Sunak imposed a £9bn providential tax on BP and Shell in May to help fund his cash relief package to tackle the cost-of-living crisis, adding the £400 cut in energy expenses that each family must pay recently. to be obtained in stages, between October and March 2023.
His new successor, Kwasi Kwarteng, has stated that it will be necessary to increase public borrowing to finance intervention in the energy market.
Mrs Truss promised “immediate action” on energy, saying she was seeking to give families confidence that they would be able to pay their expenses and get through the coming winter.
But he said the current scenario calls for more than just an “adhesive plaster” approach, with measures needed to breathe life into the resilience of the U. K. force through increased oil and fuel production in the North Sea and the structure of new nuclear power stations.
It is under pressure that would be put on companies, many of which have noticed their expenses increase by as much as 500% when their contracts were renewed. Unlike the internal energy market, there is no value limit to the companies’ energy source.
And in reaction to a statement by Victoria Atkins, Member of Parliament from Louth
The Prime Minister also said that in the face of the turmoil facing the energy market, she will examine how the market is regulated. Ofgem, the regulator, has been criticised by MPs and others for failing to respect the monetary soundness of energy suppliers. 29 of which have gone bankrupt in the last 18 months.
As well as ruling out a providence tax, Ms Truss told MPs she intended to oppose the increase in National Insurance contributions introduced through Truss. Sunak in April and prevent the proposed increase in corporation tax.
In her speech at 10 Downing Street the day before, Prime Minister Liz Truss vowed to take action to take on energy costs by the end of this week, blaming Vladimir Putin’s energy crisis and his invasion of Ukraine.
The planned 80% increase in the energy value cap on 1 October (from £1,971 to £3,549 per year for a family with the same usual consumption) attracts attention across the political and social spectrum, and the consensus is that urgent action must be taken. it’s necessary.
Ms Truss is said to be in the process of finalising her plan to freeze costs at or near their current point for a period of 3 to six months. While this would be a huge relief for millions of families facing unaffordable bills, energy costs would rise. still be painfully tall.
The cost of government intervention – most likely in the form of loans to energy suppliers to allow them to buy expensive fuel on wholesale markets without passing the cost on to domestic consumers – is estimated at at least £100 billion.
It is believed that this could be offset by levying a tax on domestic expenditures for up to two decades, a moot move, especially since there is no guarantee that wholesale costs will soon fall from their current levels.
Some are also calling on the government to take action on corporations’ energy expenditures, the costs of which are not capped. Many corporations would now face expenses that are five times higher than before. Inevitably, those higher costs are passed on to retail costs. and fuel the cost-of-living crisis: inflation stands at 10. 1% and, if forecasts predict it, it will rise.
The measures to be taken could simply come with the arrival of a cap on unit costs, or temporary relief or the suspension of the 20% VAT rate that most businesses pay on their energy bills.
Truss also said she wanted to see “shovels in the ground” as a way to improve the security of the country’s energy supply. In the absence of further details, there is speculation that this could be a sign of an upcoming green light for hydraulic fracturing. , the deeply debatable means of fuel extraction that critics say damages local properties.
He also promised tax cuts along with investments in hospitals, housing, roads and broadband infrastructure, as well as an overhaul of the NHS.
In the cabinet appointments following this afternoon’s speech, Mrs Truss appointed MP Ki Kwarteng, Business Secretary under Boris Johnson, as Chancellor of the Exchequer. MP Jacob Rees Mogg has been appointed Business Secretary.
Liz Truss, who will succeed Boris Johnson as prime minister (Tuesday), has vowed to “deliver on her promises” in the face of Britain’s energy crisis, while cutting taxes and developing the economy.
In his brief speech in which he delivered the winner of the Conservative Party leadership race (he won 80,326 votes to Rishi Sunak’s 60,399), he promised a “bold plan” to tackle the country’s economic problems.
Other major points of her proposals on energy costs will be revealed later this week, but she said she would deal with “dealing with people’s electricity bills, but also the long-term challenge we have with energy supply. “
There are rumours that one option is on Mrs Truss’s list: to freeze household energy expenditure at existing levels, with the suspension of the value cap planned by Ofgem for 1 October (see articles below).
It may only charge around £100 billion, but that money can be recouped by a tax on energy expenditure over 15 or 20 years or partly by applying an interim tax on oil and fuel companies.
There may also be more measures targeting low-income households.
Truss may also need to provide relief to business users, who are already seeing costs rise due to there being no cap on business energy bills.
One measure in this regard could simply be transitional relief or the abolition of VAT on advertising energy bills. This would save businesses a maximum of 20% (VAT on domestic invoices is 5%).
In terms of addressing the problems of energy sources, highlighted by the UK’s heavy use of expensive natural gas, Ms Truss could simply consider:
Sir Keir Starmer, leader of the Labour Party, said that “there can be no justification for not freezing energy prices”, stating that there is a political consensus in favour of such a measure and that Truss only has to find how to finance it.
Labour supports the imposition of a providential tax on oil and fuel producers.
OVO, the UK’s third-largest energy provider and supporter of renewable electricity, has published a 10-point plan to tackle emerging energy bills.
He says a “compassionate and creative” technique is needed to address the lack of sufficient assets for families, given the scale of the energy market crisis.
The regulator, Ofgem, announced last month that average annual values would rise from less than £2,000 to £3,549 when its value limit is adjusted on October 1, with a further increase of up to £6,000 a year expected at the next limit update in January.
Prices are rising due to shortages of herbal fuel in wholesale markets, largely because Russia – Europe’s main source of supply – is choking on the materials as it wages war in Ukraine.
OVO says that a strategy is needed to deal with short-, medium- and long-term problems.
In the term it says:
In the medium term:
In the long term:
An announcement on how the government plans to tackle inflation and the cost-of-living crisis is expected early next week after new Prime Minister Liz Truss or Rishi Sunak takes office on Monday.
Ofgem, the energy market regulator, has announced that its price cap will be £3,549 on October 1.
The cap limits the amount of energy businesses can qualify for per unit of energy and for constant rates, and the new figure represents the cost of a family’s annual expenses with typical usage. This applies in England, Scotland and Wales.
The current cap is £1,971, and the massive backlog will leave millions of families struggling to pay their expenses this winter. Another sharp rise is expected in January, due to high wholesale fuel prices.
Kevin Pratt, our energy expert, said: “Ofgem’s announcement that its cap will increase to £3,549 – and £3,608 for homes with prepaid meters – is not a surprise, but it is still a surprise to see energy costs rising to a barely timid level. three times what they were in March, when the cap was £1,277.
“The fact is that monthly energy prices of almost £300 a month are simply unaffordable for low- and middle-income families at a time when economy-wide inflation is running at 10. 1%. And as we know, the worst is yet to come. It will arrive in January, when the cap is expected to exceed £5,380, according to Cornwall Insight.
Incredibly, the analyst claims that it will break above £6,600 when the cap is reviewed in April 2023.
“With millions of families facing energy poverty – with energy prices exceeding 10% of the disposable source of income – it is time to push for government intervention in what is obviously a market in deep crisis. This should take place now, well before winter, so that other people have the option of not being able to heat their homes when temperatures drop.
“Whether it’s state-guaranteed loans that would allow providers to freeze costs at the current point or the arrival of a subsidised social tariff for economically vulnerable households, this should be done by October and should be a precedent for the new government. Prime Minister when he took office on September 5.
“In addition, we want to radically rethink how we manage our energy desires at the national level. Wholesale fuel costs may not come down anytime soon. We want a long-term strategy to expand reliable and affordable alternatives, adding nuclear power. And we want to make our housing stock, both new and existing, more energy efficient to reduce our consumption.
The value limit applies to domestic properties. There is no limit for advertising energy users, who in some cases see contract values increase to 10.
This is plunging businesses into severe monetary difficulties, and there are fears that many of them will be forced to close their doors. Others will not yet have the option of passing on their emerging prices to their customers, fueling runaway inflation.
Ofgem boss Jonathan Brearley, chief executive of Ofgem, said: “We know the huge impact this value cap build-up will have on UK families and the difficult choices consumers will have to make now. I talk to clients and I know that today’s news will be very concerning to many.
“The value of energy has reached record levels due to a competitive economic act by the Russian state. They have slowly and intentionally cut off fuel supplies to Europe, hurting our homes, businesses and the economy as a whole. Ofgem doesn’t have the selection yet to reflect those charge increases at the top of the value.
“The government’s relief package offers assistance lately, but it is clear that the new prime minister will want to do more to address the effect of price increases that will occur in October and next year. We are working with ministers, customer groups and industry on a number of features for the new Prime Minister that will require urgent action. The reaction will have to be proportionate to the scale of the crisis we are facing. With the right help and with the collaboration of regulators, government, industry and customers, we can find a solution to this situation.
The average energy consumption of Ofgem, based on a family of 2. 4 people, is 2,900 kWh of electrical energy and 12,000 kWh of fuel per year. This equates to 242 kWh of electrical energy and 1,000 kWh of fuel per month. Of course, this is just the average consumption of a family of 2 to 3 other people.
British Gas will have to donate 10% of its long-term profits to its energy fund, with the cash being used to provide grants to financially vulnerable customers. Without delay, it is injecting £12 million into the fund to kick-start the provision of more in the face of sky-high bills.
The company, a subsidiary of energy giant Centrica, made a profit of £98 million in the six months to June. The parent company, which thanks to the high costs of selling the oil and fuel it produces, made a profit of £1. 3 billion. in the same period.
Ofgem, the energy regulator, will announce (Friday) an increase in the energy value limit, which will come into effect in October. The cap will increase from its current point of £1,971 a year for a typical family to more than £3,500, before emerging in January to more than £4,200.
British Gas says subsidies are expected to average £750 per household: “This will be for the most financially vulnerable consumers who are struggling to pay their expenses this winter. “
British gas consumers who are in energy poverty (those who spend more than 10% of their source of income on energy costs) and with less than £1,000 in savings can apply for a grant.
Grants of between £250 and £750 will be offered to help beneficiaries pay their energy bills. The average duration of the grant is £550. More than a third of recipients receive disability benefits, 30 per cent are single parents and a quarter have children under the age of five.
British Gas already contributes £6 million a year from the fund, with additional contributions to fund express projects.
There are growing calls for Ofgem’s price cap to be frozen, and for price caps to be covered by government intervention (see story below). No announcement on government policy to address the energy crisis affecting domestic and advertising consumers is expected until the appointment of the next prime minister on Sept. 5.
Shell Energy is reimbursing and compensating 11,275 prepaid consumers who were overcharged between January 2019 and September 2022. Refunds will be issued to affected consumers.
Ofgem, the market regulator, says the total number of injured visitors who need to be reimbursed is £106,000. The average amount reimbursed to affected consumers is £9. 40.
In addition, the supplier will donate £400,000 to Ofgem’s Voluntary Consumer Repair Fund and £30,970 in goodwill invoices to affected customers, equating to a total payment of £536,970.
In 2019, Shell Energy, then operating as First Utility, agreed to reimburse and offset 12,000 accounts receivable it had overcharged when the Ofgem value limit was introduced.
Keith Anderson, chief executive of Scottish Power, is leading efforts to secure the government a £100 billion plan that would freeze energy costs at existing values for two years and allow energy suppliers to pay for the existing wholesale value of natural gas.
According to reports from the BBC, Anderson has discussed his concept with MP Kwasi Kwarteng, the business secretary who is expected to be chancellor in Liz Truss’s government if she wins the war to lead the Conservative Party and become prime minister on September 5.
Ofgem, the energy market regulator, warns others to beware of fraudulent emails sent in their name. In a tweet (24 August), he said: “There are reports that thieves are emailing consumers telling them they are from Ofgem and asking for the main direct debit points to pay for the winter electricity refund. IT’S A SCAM. Check the links and be #ScamAware. “
The government’s winter energy payment of £400 discussed will be automatically deducted from electricity expenses during the winter, so there is no need to send any information to take advantage of it or receive it.
Anderson is expected to share his proposals with Scotland’s First Minister Nicola Sturgeon and other power companies.
It is recommended that the government guarantee loans of up to £100 billion on behalf of energy suppliers, allowing them to borrow from advertising lenders at competitive rates. They would then use that cash to buy fuel at traditionally higher wholesale prices without passing the charge on to consumers.
The government’s cash — known as the “deficit fund” — would then be used to pay off debts, and the fund would be repaid through a tax on energy expenditures over several decades or through general taxes.
Under the plan, there would be no increase in the energy value limit from its current point of £1,971 per year for a typical family with average consumption. Ofgem, which administers the cap, is due to announce the new cut-off point, which will come into effect on October 1, Friday, August 26.
Ofgem adjusts the limit to reflect prices incurred through suppliers in wholesale markets. It is expected to surpass £3,500 in October before emerging again in January 2023 and April 2023, and analysts say it could reach £6,000 a year due to the skyrocketing rise. wholesale prices.
These costs are largely influenced by reduced supply from Russia, Europe’s largest supplier of natural gas. Next week it plans to shut down the Nord Stream 1 gas pipeline to Germany for three days, ostensibly for regime maintenance reasons, although there are suspicions. that Russia is a source of constraints to cause political and economic turmoil.
In February, Anderson recommended the arrival of a below-cost social tariff available to low-income families (see article below). However, the increasing magnitude of the likely increases in value threatens millions of higher-income families with serious monetary difficulties, hence the promotion of the deficit fund solution.
A director has resigned from her post at the UK’s energy regulator in protest at changes to the way it sets the energy value limit, writes Andrew Michael.
Christine Farnish, non-executive director of Ofgem, tendered her resignation to the secretary, Kwasi Kwarteng MP, in early August.
Farnish said he would step down from the position he took over in 2016 because he did not believe the regulator had “struck the right balance between the interests of consumers and those of providers. “
The cap limits the amount fuel and electric companies can qualify for power equipment and prevailing rates. It is expected, especially in October, to exceed £3,500 a year, up from £1,971 today (for a typical consumption family).
Consumer rights campaigners have warned that the move, along with a further increase that would take it beyond £4,200 in January 2023, would force millions of consumers into energy poverty, as energy prices account for more than 10% of their disposable income.
At the beginning of August, Ofgem announced that it would change the value limit method to allow suppliers to recover all prices from their consumers’ purchasing power at the highest values. It also announced that it would increase the limit from two to four reviews. consistent with the year.
Rising electricity tariffs have been a major contributor to the rise in inflation the UK has experienced in recent months, exacerbating the life crisis facing families across the country and causing interest rates to rise sharply.
Earlier this week, it was reported that consumer costs rose 10. 1% in the year to July. The Bank of England warned that inflation could peak at 13% until the end of 2022 and remain at higher levels in 2023.
It is expected to report on interest rates at its next announcement on Sept. 15.
Ms Farnish told The Times: “I resigned from Ofgem’s board of directors because I may not have adopted a key resolution to recoup additional supplier pricing on consumer spending this winter. “
Farnish’s departure is a major blow to the embattled regulator, which has recently come under fire from MPs on the Business, Energy, Industry and Science Committee who have been deeply critical of its functionality in recent years.
They argued that the collapse of the U. K. ‘s energy supplier market, in which 30 companies have gone bankrupt in the past 18 months and there are now no visitor price lists below the price cap, could have been mitigated by tighter regulation.
Ed Miliband, Labour’s spokesperson for climate update and net zero, said Farnish’s resignation is “further evidence that the government is asleep at the wheel when it comes to the electricity bill crisis”.
The Labour Party weighed in on how to ease the cost-of-living crisis, saying it would “not allow other people to pay a penny more on their fuel expenses this winter. “
The existing energy value limit (set at £1,971 a year for those who use it) will increase to more than £3,500 from 1 October. The actual figure will be announced on August 26 via Ofgem, the market regulator that sets the cap based on wholesale energy values.
The cap is set to be replaced from January 1, 2023, with analysts at Cornwall Insights forecasting one point above £4,200 (see below).
In a widely watched speech later in the day, Labour leader Sir Keir Starmer said his plan to prevent emergent spending this winter would “save the typical family £1,000 now, reduce energy prices in the long term and help fight inflation”.
The Labour Party says it would freeze the cap at its current level, partly covering the £29 billion charge by levying extra taxes on oil and fuel giants that it says are making “mind-boggling” profits. Rishi Sunak, when he becomes chancellor in April, would generate £8 billion, according to the Labour Party.
Critics argue that power corporations like BP and Shell get the most out of their profits from foreign trade, so it’s easy to impose a providential tax on profits on them on the scale required.
Labour’s plan would also scrap the proposed £400 relief in household electricity costs, designed by the Conservative government and set to start in October. This would generate an additional £14 billion.
About £7 billion would be raised by cutting public debt due to inflation relief.
Rishi Sunak – who has lately been vying for the leadership of the Conservative Party with Liz Truss – has announced a £9bn providential tax on the profits of electricity companies, with the aim of paying for the £400 cut in bills.
Sunak and Truss have said addressing the cost-of-living crisis in general and emerging energy costs in particular would be a precedent if they win the race for leadership and the position of prime minister on Sept. 5.
Ed Davey’s Liberal Democrats have already called for the cap to be removed.
Labour’s proposed emergency measures come with a Warm Homes scheme designed to meet long-term needs and expenses by insulating 19 million homes across the country over the next decade.
It says that freezing the price cap will increase inflation by four percentage points from its current point of 9. 4%.
Sir Keir said: “The cost-of-living crisis in Britain is deepening, leaving other people worried about how they will get through the winter. Labour’s plan to save families £1,000 this winter and invest in sustainable British energy to cut costs in the long term is a direct reaction to the national economic emergency that leaves families fearful for the future.
Another of the measures contained in today’s speech is the commitment that energy consumers with prepaid meters pay the same as others who pay their expenses in arrears.
At the moment, prepaid consumers pay between 2% and 3% more (the existing prepaid limit is £2,017), with the difference attributed to higher prices from the administration of the prepaid system, which Labour says is justifiable.
Analyst Cornwall Insight has raised its forecast for October’s value limit to £200, saying it will be £3,582 a year for a typical average household consumption. This represents an 80% (£1,611) increase from the existing limit of £1,971. .
Ofgem, the energy market regulator, will verify the October cap on August 26. But the certainty of a massive increase is prompting calls for the government to take urgent action to help families cope with fares that for many will be unaffordable.
The figure for January 2023, when the cap will be adjusted again, is even bleaker and stands at £4,266. That’s £650 more than Cornwall’s previous estimate.
This sharp increase is partly due to high wholesale fuel and electricity prices. Ofgem is increasing the limit to allow energy suppliers to pass on the increase in market prices.
The bills will also increase dramatically following an update to Ofgem’s cap-setting system to allow utilities to recoup additional costs related to sourcing supplies in the long term.
Cornwall says the cap will return to April 2023, at £4,423, before falling to around £3,800 in the second part of next year. This figure is still particularly higher than last October.
Dr Craig Lowrey of Cornwall Insight said: “This new forecast for the January-March 2023 quarter further highlights the need for families who will struggle to pay their energy expenses this winter.
“An increase of more than £650 in the January forecast is a shock. The cost-of-living crisis is already at the forefront of the news as more and more people are facing energy poverty, which will only add to concerns. “
Dr Lowery said the timing of the Ofgem upgrade is unfortunate, but it aims to prevent more utilities from going bankrupt, which would result in additional costs for consumers. Around thirty energy suppliers have gone bankrupt since the beginning of 2021.
He argues that the very way of life of the limit deserves to be questioned: “Instead of criticizing the limit method, perhaps it is time to think globally about the position of the limit. After all, if it doesn’t reduce costs for the customer and undermine suppliers’ business models, we have to ask ourselves whether they are compatible with the objective, especially in these times of unprecedented situations in the energy market.
“Right now, the existing value limit applies to consumers, to suppliers, or to the economy. “
Cornwall joined those calling for government action to help suffering households: “It is critical that the government uses our forecasts to push for a review of the customer assistance programme. If the £400 [which will be deducted from all electricity costs in stages between October and March] was not enough to lessen the effect of our previous forecasts, it is in fact not enough now.
MP Rishi Sunak, who is running against MP Liz Truss to be elected leader of the Conservative Party and next Prime Minister from September 5, has reportedly said he will increase the pay up to £400 if he wins.
Mrs Truss has not yet defined her policy on this; He has indicated that he will introduce tax cuts to help tackle the cost-of-living crisis.
Opposition MPs have called for higher taxation of electricity company profits to fund measures to help the most vulnerable. There are also calls for VAT and green taxes to be removed from energy bills.
Ed Davey, leader of the Liberal Democrats, believes the government will completely remove the cumulative value cap in October and fund the £40 billion burden through provincial taxes and general taxation.
Another option proposed by industry figures and teams of interest to customers would be the creation of a “social” tariff for low-income families and for those who use gigantic amounts of force to force medical equipment.
That value would be well below the ceiling and would be paid for through deductions from other customers’ expenses or, again, through tax revenues.
It has been confirmed that the maximum amount energy suppliers can qualify per unit of fuel and electric power will be reviewed every three months, rather than every six months.
Energy regulator Ofgem has officially moved on from revising its energy value limit two to four times a year. It states that more regular updates will reflect changes in wholesale fuel and electricity prices more temporarily and accurately.
The limit will now be reviewed every January, April, July and October.
Warning families of a “very complicated winter” ahead, Ofgem said the adjustments would stabilise the energy market and reduce the threat of more energy suppliers collapsing, an end result he said would further increase costs.
The current maximum value is set at £1,971 per year, in normal use. The next announcement of the value limit will be made through Ofgem on August 26 and will be implemented on October 1.
Energy market analysts, Cornwall Insight, expect the cap could reach £3,359 between October and December, and reach £3,616 between January and March next year.
The idea is that more common revisions to the cap may simply mitigate the “rocket and pen effect” on energy costs, where costs rise in line with wholesale costs but slow when costs fall.
Ofgem chief executive Jonathan Brearley said: “As a result of Russia’s actions, the volatility in energy markets we experienced last winter has lasted much longer, with tariffs much higher than ever before. This means that the burden of supplying electricity and fuel to families has increased significantly.
“The trade-offs we have to make on behalf of consumers are incredibly complicated and there are simply no simple answers right now. Today’s adjustments to get the price cap to do its job, ensuring that consumers only pay the actual cost of their energy, but also that it can adapt to today’s volatile market.
Responding to the news, Gillian Cooper, head of energy policy at Citizens Advice, said: “The shift to a quarterly value cap limits the risk of more suppliers going bankrupt, which is a smart thing to do. But our expenses are already incredibly high and continuing. “lift.
“The government has the right to provide monetary aid to the population, but it may not be enough to keep many families afloat. He wants to be in a position to react before winter sets in.
“Ofgem wants to make sure its suppliers help consumers who are struggling to pay. It holds electric utilities accountable so that other people aren’t chased by debt creditors or driven to prepaid meters when they can’t pay their bills.
According to the new forecasts, the average household energy expenditure is expected to remain above £300 per month until at least 2024.
Energy analysts Cornwall Insight say the default rate cap will push expenses to more than £3,000 a year for at least the next 15 months, peaking at £3,649 until next summer.
The company says continued market volatility caused by uncertainty over Russian fuels will see the new energy price cap reach £3,359 between October and December and £3,616 between January and March 2023.
Dr Craig Lowrey of Cornwall Insight said: “Although the Government promised something to increase energy in October, our cap forecast has risen to over £500 since the investment was proposed, and the fact is that the £400 promised will only scratch the surface of this project’s problem.
“Re-examining the provision of funding for the coming limitation periods deserves to be one of the most sensible tasks on any new prime minister’s to-do list. As our value cap analyses show, converting VAT and policy costs will only reduce expenses. While it’s the wholesale prices of height that drive the increases.
The new forecast comes as oil giant BP’s second-quarter profit rose today to a 14-year high of £6. 9 billion.
Commenting on the results, BP Chief Executive Bernard Looney said: “Our people continued to work intensively during the quarter to help solve the energy trilemma: secure, affordable and low-carbon energy. “
The main points on how families in Britain will get a £400 reduction in their energy costs under the Energy Bill Support Scheme have been set out through the government.
For consumers paying by direct debit, a £66 reduction in their spending will be implemented in October and November. From December to March 2023, this amount will increase to £67.
The abatement will be implemented on a monthly basis, regardless of whether consumers pay their energy expenses monthly or quarterly, or if they have an associated payment card. This is to ensure that anyone moving forward in this era fully benefits from the £400 reduction. .
Starting in October, families with a prepaid meter will get bonuses in the first week of each month via SMS, email or post, the main points of contact registered with the energy provider. However, those consumers will want to take advantage of the reduction at their same old charging point, such as a PayPoint or post office.
The reduction applies to all UK families with an electricity meter at home, adding to students and other tenants whose energy costs are already included in the price of rent. In such cases, owners will have to pass on the reduction appropriately, in accordance with the established regulations. through the power regulator, Ofgem.
According to the government, only 1% of families will not benefit from the electricity bill system, either because they do not have an electricity meter at home or because they do not have a direct relationship with an energy supplier, as is the case with the country’s citizens. Park Houses.
It showed that those Americans will receive matching monetary aid for their energy expenses, the main points of which will be announced in the fall.
Trade and Energy Secretary Kwasi Kwarteng said: “While no government can control global fuel prices, we have a duty to intervene where we can and this significant £400 energy cost relief we are providing will go some way to helping millions of people. families in the colder months.
The government is under pressure to ensure that, in any case, no family is asked for their bank details.
Respected energy market analysts, Cornwall Insight, expect the energy price cap, currently at £1,971, to rise by almost 80% in October to around £3,500 a year for a typical household. The new limit will be announced on Aug. 26.
Wholesale costs – which is the point of the ceiling – have risen especially in recent days due to the reduction of sources from Russia to the European Union.
There are fears that the cap could reach £4,000 by January 2023, stretching household budgets well beyond the breakup limit for millions of people. Commentators are calling for more government intervention so that bill payers can cope with emerging costs.
MEPs are urging the regulator, Ofgem, to extend the so-called social tariff to provide electricity to other people on lower incomes.
Rishi Sunak has pledged to scrap the 5% VAT on household energy expenses as part of his campaign for the new Conservative Party leader and prime minister on September 5.
The former chancellor said that if the new value cap on energy expenditure, which will be announced through regulator Ofgem on August 26 and implemented on October 1 this year, exceeds £3,000, it will remove VAT on energy for the next 12 months, saving energy. . average family around £160.
Sunak has in the past opposed calls to remove VAT from energy bills, but his supporters deny he is making a U-turn given that the replacement would be temporary.
The most recent estimates from energy analysts, Cornwall Insights, expect the new cap to be £3,244, up from the existing £1,971.
The energy value limit refers to the maximum amount that energy providers can charge according to the kWh of fuel and electric power (or the “unit rate”) per year, and also includes a maximum daily “continuous rate,” which is the rate of Getting the Power Value. Electrical energy for your home.
The proposed VAT cut would mainly apply to the extraordinary payment of £400 for electricity expenses that Rishi Sunak, as chancellor, announced in May as part of the energy bill plan.
The £400 will be automatically added to each household’s electricity account balance for the six months starting in October. If you use a prepaid meter, £400 will be added to your meter balance or paid as vouchers.
A set of other measures has also been announced for others receiving benefits subject to means verification (see articles below).
Rishi Sunak’s promise on VAT – the first tax cut he unveiled in his campaign for the Conservative Party leader – would be part of his “Winter Plan” which he says will tackle inflation and the overall cost of living.
Earlier this week, MPs on the Business, Energy, Industry and Science Committee sharply criticised Ofgem’s functionality in recent years, denouncing the collapse of the energy supplier market (30 corporations have gone bankrupt in the last 18 months and no stock lists are available). . below the maximum value level) could have been mitigated by tighter regulation.
MEPs said: “Ofgem has proven to be incompetent as a regulator of the retail energy market over the past decade. This allowed suppliers to enter the market without ensuring that they had sufficient capital, appropriate business plans, and were guided by Americans with the applicable expertise.
“The regulator has allowed poorly capitalized providers to rely excessively on visitor credit balances and operate with insufficient coverage, leaving the market position ill-equipped to absorb wholesale price increases. Existing regulations were not enforced and Ofgem did not understand the business models the suppliers are guilty of supervising.
“The government has prioritised festivals over effective market regulation and has Ofgem’s lack of oversight in this important market. “
Ofgem responded by saying that it was running to reform the entire market.
Anticipating the effect of an upper price cap, MEPs recommended the advent of a “social tariff”, intentionally set at a price below cost, to help those who need it most.
They said: “The government deserves to introduce a social tariff for the most vulnerable consumers and a relative tariff for the rest of the market.
“The effect of the energy price crisis on households is persistent and severe, especially in the context of the cost-of-living crisis, and is likely to lead to an unacceptable increase in energy poverty and hardship this winter. We welcome the government’s May 2022 relief scheme, but it is no longer sufficient to cover the expected value increases in October.
“The government will need to update its program targeting low-income, fuel-starved and vulnerable consumers without delay, and expand a program to vulnerable consumers to boost the repayment of energy debt resulting from this crisis.
Energy market regulator Ofgem has published its investigation into how suppliers adjusted customers’ direct debit bills earlier this year. Many families have noticed sharp increases, with 500,000 bills growing more than 100%, writes Candiece Cyrus.
He found that:
Of the 17 major suppliers in the market, 4 (Ecotricity, Good Energy, Green Energy UK, and Utilita Energy) had moderate to severe weaknesses in their processes and controls.
Ofgem engages with those corporations to make “rapid and physically powerful improvements” to processes and a re-evaluation of direct customer debits when necessary. If those providers don’t improve enough temporarily, Ofgem says it will take enforcement action.
Two companies, TruEnergy and the UK Energy Incubator Hub (UKEIH), had serious weaknesses. UKEIH has since ceased operations and its consumers were absorbed through Octopus on July 9. Enforcement action against TruEnergy is being considered.
Bulb, E. ON, Octopus Energy, Outfox the Market, Ovo, Shell, and Utility Warehouse were found to have weaknesses or loopholes in their processes that can lead to poor outcomes for consumers. Ofgem has initiated a compliance commitment with those suppliers.
No major issues have been discovered at British Gas, EDF, ScottishPower and SO Energy, Ofgem says it will work with those suppliers to continuously improve. Businesses will be asked to review customer direct debits to make sure they are correct, offering greater protection for consumers.
The affected companies will have to submit their plans for potential problems within two weeks for approval by Ofgem.
Ofgem can force companies to take action on their operations, fine them and prohibit them from accepting new consumers if the necessary modifications have not been made.
Where appropriate, Ofgem expects suppliers to correct any errors in the calculation, adding refunds where necessary and if a goodwill payment is warranted.
Households face even greater financial strain following analyst Cornwall Insight’s forecast change that Ofgem’s energy value cap will rise to £3,244 in October, from £1,971 recently and notably above the £2,980 discussed last month. past.
The company says the cap, which limits the amount of energy companies can qualify for energy pools and current tariffs, will rise further to £3,363 in January 2023. He previously predicted that the cap would be £3,003 at this stage.
The cap is reviewed every six months and increased from £1,277 to its current level in April. After the October increase, it will be reviewed every three months to allow for greater responsiveness to changes in wholesale energy prices.
The figures used correspond to the annual energy load of a typical family that benefits from a popular variable tariff and pays by direct debit. The limit does not impose a limit on the number of bills, as prices are decided based on usage. .
If Cornwall Insight’s estimates prove accurate, expenses will increase by more than 160% between March 2022 and January 2023 due to emerging wholesale prices (see articles below).
The government has announced a package of measures to help others cope with the cost-of-living crisis, adding money-tested allowances and £400 relief on electricity costs for each and every family in the autumn. .
It remains to be noted how the recent political turmoil, coupled with Boris Johnson’s resignation as leader of the Conservative Party and the resulting leadership elections, will drive long-term plans to tackle peak levels of inflation across all sectors of the economy.
The government has included measures to tackle emerging energy costs, continue the deployment of smart energy meters and hedge against cyber threats in smart devices, in its energy security bill, which was introduced in Parliament yesterday.
The ambition is to generate £100 billion of private sector investment in the energy sector by 2030, promoting hydrogen, offshore wind and heat pumps as new energy supply resources.
Given the turmoil in the government following mass resignations in the run-up to Boris Johnson’s resignation as leader of the Conservative Party, the bill’s passage in Parliament could be delayed.
The bill calls for the energy price cap to remain in place beyond its original 2023 expiration date, with the goal of keeping energy costs low for 11 million families with default/standard variable price lists and 4 million families with prepaid meters.
The cap limits the amount energy providers can rate families according to the unit of fuel and electricity, as well as a constant rate, while reflecting fluctuations in wholesale energy prices.
The last update to the cap came in April, when it went up 54% to £1,971 per year for households with average energy consumption. For families with prepaid meter tariffs, it has increased to £2,017 per year. The result of rising wholesale costs due to growing foreign demand and pressure on materials due to the war in Ukraine.
Energy analytics firm Cornwall Insight predicts the cap will reach £3,244 in October and £3,363 in January next year.
Dame Clare Moriarty, of the customer referral charity Citizens Advice, supports raising the value limit, but said more measures are needed in the short term to enable families to cope with energy costs: “At a time when millions of people are already struggling to make ends meet, It’s a relief to see the government expand this extension. Value limits beyond 2023.
“However, much of what we pay for our energy goes straight out the window, as many of our homes are drafty and poorly insulated.
“We are pleased that the government is taking a long-term view for other people to pay their electricity bills, but wants to urgently introduce energy power measures so that families can stay warm this winter.
The new bill also envisages continuing to roll out smart meters for families and small businesses across Britain until the end of 2025. It aims to review vendors’ installation targets for the last two years of implementation in 2023, and to review the entire set of Wise Meter Counting Formula after 2025.
Smart meters demonstrate the amount of energy used, as well as its cost, in real-time, allowing consumers to see where they can consume energy and save money.
Smart meters would also allow consumers to visualise how much energy they can save using time-of-use price lists, which could arrive in the UK in the coming months. These price lists inspire families to use energy during off-peak hours, for example to recharge an electric vehicle battery for lower cost benefits and extend the call 24 hours a day.
The bill will also prevent “cyber hacking” of smart devices, such as electric vehicle charging stations and smart heat pumps, by giving the government more powers to introduce minimum technical requirements for data security and privacy.
The government will also have power over the companies that control those devices remotely.
Kwasi Kwarteng, Business and Energy Secretary, said: “To ensure we are no longer held hostage by rogue states and volatile markets, we will need to push forward plans to build a truly clean, affordable and evolved energy formula in Britain. .
“This is the biggest reform of our energy formula in a decade. We will cut red tape, attract investment to the UK and capture as much of the global market share as can be imagined in new technologies to make this plan a reality.
Dhara Vyas, from industry association Energy UK, said: “At a time when energy consumption is reaching unprecedented levels, it is right that the government urgently legislates to protect consumers, while also putting in place frameworks and regulations for the decarbonisation of the UK economy to reduce spending in the energy sector in the long term. “
Energy consumers will pay around £2. 7 billion to cover the cost of moving 2. 4 million consumers to new suppliers following the closure of 28 electricity corporations since June 2021, according to the National Audit Office (NAO), the independent parliamentary framework that oversees public spending. .
The NAO criticised the role played by Ofgem in regulating the electricity market, which is guilty of dealing with the consequences of a fall in the wall.
The estimated charge of £94 per family will be spread across all energy customers, not just those whose businesses have gone bankrupt.
According to the NAO, Ofgem’s strategy for licensing and tracking suppliers in recent years has increased the risk of corporations going bankrupt; the NAO has said that significant increases in wholesale energy costs are the main cause.
Gareth Davies, director of the NAO, said: “Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS) have ensured that the vast majority of consumers do not experience any disruption to their power source in the event of a supplier failure. .
“However, by allowing so many suppliers with fragile finances to enter the market and by imagining that there could be a prolonged generation of volatility in energy prices, Ofgem has enabled the growth of a market that is vulnerable to large-scale shocks.
“Consumers have borne the brunt of supplier woes at a time when many families are already in a difficult money situation after seeing their spending reach record levels. We want to expand a supplier marketplace that works for consumers.
The NOA said that until 2018, Ofgem had not analysed the monetary situation of power corporations when they applied for a licence or after entering the market. Although it began tightening regulations in 2018, NOA said Ofgem failed to address the dangers with existing suppliers. until 2021.
NAO said Ofgem “set a set of targets for the regulation of its retail market around price, stability and innovation, against which it reviews and reports on its functionality at least annually. “
An Ofgem spokesperson said: “Ofgem accepts the conclusions of the NAO report, which are in line with our own findings and the recommendations of the independent Oxera report we commissioned, and we are already working hard to address any issues raised.
“While the global impact on the value of energy, unprecedented in a generation, would have led to market exits in any regulatory framework, we have already made it clear that Ofgem’s suppliers and monetary resilience regime are not strong enough. This has contributed to a significant number since August 2021.
“We welcome the popularity of the NAO that Ofgem began tightening regulations in 2018 and continued to do so until 2022. Our announcement this week continues this procedure with the coverage of customers’ credit balances and strict new measures for the monetary fitness of energy suppliers (see story below).
“While no regulator can, or should, ensure that companies do not go bankrupt in the future, we will continue to adopt a whole-market strategy to expand the regulatory regime, ensuring a fair and physically powerful market for consumers, which helps maintain fair prices as we move forward. Moving away from fossil fuels and towards affordable, green, locally produced energy.
NOA says the estimated fee of £94 per family to cover control of the visitor reassignment process could decrease or decrease as the fee for businesses exiting the market is uncertain.
An additional charge may also be added to manage the Bulb Energy energy company. As the largest supplier with 1. 6 million customers, Bulb Energy was placed under special management last year. The government spent £900 million to hire a director to run the business in 2021. 2022 and budgeted an additional £1 billion to run it in 2022-2023.
Ofgem, the energy market regulator, is introducing currency controls to reduce the risk of suppliers going bankrupt. And if companies go bankrupt in the future, they will protect consumers from the costs of administrative consequences.
Since September 2021, 28 energy providers have gone bankrupt, leaving all families with the percentage of the bill to reassign their consumers to new suppliers and protect any credit balances they may have had with the deceased supplier.
This added £94 to the home’s annual energy costs.
Ofgem offers:
Jonathan Brearley, chief executive of Ofgem, said: “The energy market remains incredibly volatile and a number of primary geopolitical issues continue to exert great pressure. Ofgem is working to make sure that the suppliers of their positions can weather the ongoing storm.
“By ensuring that suppliers implement well-funded, sustainable and more resilient business models, we can avoid the supplier bankruptcies we saw last year, which caused enormous stresses and concerns and added prices to everyone’s bills.
“But if some fail again, customers’ credit balances and tax and renewable energy bills will be protected. “
Consumer teams have long criticized the formula that companies use to draw on credits from their customers’ accounts to finance their operations; Brearley said those balances “are used through some vendors as an interest-free business credit card. “
The concept of the reform is that suppliers will be required to have sufficient current capital to operate without jeopardizing their customers’ credit balances. Ofgem has been criticized in the past for allowing dozens of corporations to enter the market over the past decade without a good foundation. scrutiny of its monetary strength.
Ofgem says it needs to build long-term resilience by fostering sustainable business models and putting an end to risky behaviours. It has developed stricter access requirements for new suppliers and introduced new evidence for other people who create and run energy companies to be compliant and suitable to do so.
The government has announced that the first of two cost-of-living monetary payments, totalling £650, will be paid from 14 July to 8 million UK families receiving means-tested benefits.
The first payment of £326 will be made into beneficiaries’ bank accounts until the end of July.
To be eligible for the first payment, applicants had to receive one of the following benefits or have initiated a successful application by May 25, 2022:
This payment will be tax-free, will not count toward the benefit limit, and will not affect existing benefits. The second payment of £324 will be held in the autumn at a date to be determined, with the main points of eligibility to be provided in due course.
The £650 payment to low-income families was announced in May through Chancellor Rishi Sunak MP, along with a range of other monetary measures. See the article below.
MAY 27 UPDATE: Ofgem, the energy regulator, warns people not to fall for scams where criminals claim it is mandatory to register to receive the bills or bill reduction listed below, before asking recipients to provide primary bank details or click false. websites. Ofgem has not issued any such notices or requests, so any emails, text messages or other communications should be ignored and reported to Action Fraud in England, Wales and Northern Ireland or Police Scotland.
Chancellor of the Exchequer Rishi Sunak has set out a £15 billion package of measures to help households cope with the sharp rise in energy costs expected later this year.
All families will see their expenses reduced by £400 in the autumn, without needing to be repaid, while those receiving means-tested benefits, pensioners and those receiving disability benefits will receive lump-sum bills directly to their bank accounts. be mandatory to apply.
The value cap on energy bills, controlled by market regulator Ofgem, is set at around £2,800 per year for average households on October 1, from £1,971. The current figure for families with a prepaid meter is £2,017 per year.
Ofgem frontman Jonathan Brearley showed off the £2,800 last week (see article below).
The chancellor also announced a tax on the energy profits of oil and fuel producing companies, which have seen a skyrocketing increase in profits due to high wholesale costs; This is expected to generate £5 billion.
The government also has the option of extending this “windfall profit” tax to the electric power generation sector.
The measures announced include:
In addition, Sunak said the £200 energy bill subsidy in February and to be deducted from all household electricity expenses in October will be doubled to £400.
Above all, he said he would like to be reimbursed. Originally, the scheme provided for a £40 per year deduction from expenses for five years to recoup the original £200 grant.
As part of his speech to Parliament on the question of life, the Chancellor announced that benefits payable in the UK from April 2023, added to the state pension, would accrue in line with the consumption rates measured in September.
This restores the “triple lock,” according to which the fiscal year accumulates the largest of the three measures: customer value inflation, average wage growth, or 2. 5%.
The government opted for the triple lockdown for the 2022/23 financial year as a reaction to the pandemic, but the chancellor announced she would reinstate it in September for the 2023 increases.
The recent CPI peak for April this year, calculated through the Office for National Statistics, is 9%.
The Bank of England and other financial commentators have warned that inflation could remain stubbornly high until the end of 2022 and potentially beyond.
If this is the case, the recalculation of benefits will result in a significant increase in the state pension, valued at several hundred pounds per year for the 2023/24 tax year. The UK’s state full pension is lately £185. 15.
In her speech today, the Chancellor announced a transitional tax on energy gains as a component of the government’s cost-of-living programme.
Oil and fuel corporations will face an additional 25% tax on their profits, raising their effective rate from 40% to 65%. This is a transitional measure that will be phased out when oil and fuel costs “return to traditionally more general levels. “
Sunak said a “sunset clause” will be enshrined in the legislation, in the hope that the cumulative transience in tax rates will stop by the end of 2025.
He also announced a new allocation of investments to cushion the blow to oil and fuel companies. Companies will now get a 90% tax break for every pound invested, almost double the previous level. Mr Sunak said that “businesses will benefit from a vital new incentive to reinvest their profits”.
Sunak referred to the “extraordinary” profits made also in the power generation sector and noted that France, Italy, Spain and Greece have already taken steps to deal with the situation.
The government is studying whether production companies will also be subject to a tax on profits.
Sunak estimated that the tax on the energy profits of oil and fuel producers will raise £5 billion over the next year to help fund the £15 billion measures announced today.
The average household energy expenditure could exceed £800 a year this autumn when the new energy value limit comes into force.
Jonathan Brearley, chief executive of energy regulator Ofgem, told MPs on Parliament’s cross-party committee on business, energy and commercial strategy that he expects the maximum value of energy to reach “around £2,800” when it is recalculated later this summer.
The cap, implemented in April, amounts to £1,971.
Such a move would exacerbate the current cost-of-living crisis in the UK, which is already being felt by millions of households.
Brearley attributed the increase to continued volatility in the fuel market. This has been exacerbated by Russia’s invasion of Ukraine, its impact at the source, and the resulting impact on fuel prices.
Volatile energy rates have already led to the bankruptcy of 30 UK electricity companies since the beginning of 2021. These collapses can also increase customer rates due to the need to reassign customers from failing companies to other providers.
The rate cap, which limits the amount electric corporations can qualify per unit of fuel and electric power provided to domestic customers, as well as any constant costs, increased by as much as 54% on April 1 of this year.
This spring’s increase means that the bill for a household with average consumption, who benefit from a variable dual-energy tariff and pay by direct debit, has risen from the previous value limit of £1,277 to just under £1,971.
Prepaid meter users also saw an increase in price, from £1,309 to £2,017, also in normal use.
The cap, which is lately calculated twice a year and which Ofgem is pushing to be reviewed quarterly from autumn (see articles below), applies to around 22 million homes in England, Scotland and Wales. Northern Ireland does not have a cap value.
Brearley told MPs that rising energy costs are “a once-in-a-generation event, not noticed since the oil crisis of the 1970s. “
He also warned that the number of other people in energy poverty (explained as when a family has to spend more than 10% of their disposable income source on heating their home) could simply double.
Under the existing calculation system, the maximum value will be recalculated next August before being implemented on October 1. Brearley estimates that by the fall, 12 million homes could be in energy poverty.
Brearley told MPs: “We are dealing between two versions of events. A scenario in which costs would return to their previous level, for example in the case of peace in Ukraine, but a scenario in which costs could rise further if we were to see, for example, a disruptive disruption of the supply of fuel materials from Russia. “
The Ofgem chief also apologised for the regulatory loopholes and admitted that if financial controls had been put in place earlier for suppliers, fewer companies would have gone bankrupt over the past year due to their lack of preparedness for the sharp rise in wholesale energy prices.
The estimated increase in the price cap is expected to renew calls for the government to take additional steps to mitigate the impact on families facing rising energy costs. One solution recommended by opposition constituents and activists is a providential tax on power corporations that made providence profits in the first component this year.
Energy research specialist Cornwall Insight has today provided a study of the most likely effect on energy expenditures of the move to a quarterly price cap review, compared to the existing price cap review every six months (see article below).
Dr Craig Lowrey, senior consultant at Cornwall Insight, said: “The devil will be in the details. With greater complexity comes a greater threat of unintended consequences. It would have been useful to see a more detailed assessment of the maximum value levels for the new global versus the old from the consumer’s perspective.
Cornwall Insight predicts that average annual energy expenditure would reach £2,750 this winter under the existing price cap system. As part of a quarterly review of the price cap, it predicts expenses would reach £2,600.
While this represents a significant increase from the existing value limit of £1,971 per annum for a family with average consumption, it would mean a 5% relief for the six-month-per-year review.
Ofgem, the energy market regulator, is conducting a formal consultation on its proposal for a quarterly review of the price cap. He favors this decision because, he argues, it would be necessary for energy suppliers who can adjust their energy prices according to changes in wholesale prices. tariffs.
Any adjustment would take effect from October 2022, at which point the existing value limit is expected to be replaced (the new point will be announced in August).
The UK’s energy regulator, Ofgem, is seeking reforms that would allow its energy value limit to be adjusted quarterly rather than twice a year.
The cap was introduced in 2019 to protect consumers from unfair costs, restricting what energy providers can charge. It was recently updated based on wholesale energy prices in April and October.
Under the proposed reforms, the limit would be updated every three months in January, April, July and October.
The cap, which limits the amount consumers can be charged per unit of energy used and the related prevailing fuel and electricity prices, does not set a cap on bills. The more energy you use, the higher your bill.
Currently, the limit is £1,971 for an average family on a variable-rate dual energy tariff (gas and electricity), paid by direct debit. It is feared that it could reach £2,600 or even £3,000 in October.
Last week, the government announced in the Queen’s Speech that the cap, imposed as a transitional measure in 2019, would be extended beyond 2023 depending on market situations (see article below).
Jonathan Brearley, chief executive of Ofgem, said the transition to quarterly reviews of the cap could simply reduce costs: “Our reforms will make consumers pay fair value for their energy while ensuring the resilience of the entire sector.
“Today’s proposed update would imply that the price cap would better reflect existing values in the market and that any price discounts would be passed on to consumers more quickly. “
Ofgem believes that adjusting the price cap every quarter will help energy suppliers remain successful as wholesale prices rise and fall rapidly, reducing the risk of businesses going bankrupt.
Price volatility has led to the bankruptcy of around thirty UK electricity companies since the beginning of 2021. These collapses can increase customer rates due to the need to reassign customers from failing companies to other providers.
Brearley added, “The past year has shown that we want to make adjustments to the value limit so that providers are better at managing risk in those unprecedented market conditions. “
In the midst of a cost-of-living crisis, reducing energy expenses may simply ease the pressure on UK household budgets. However, if the wholesale value of energy continued to skyrocket, the bill would be passed on to consumers much faster if a quarterly cap were put in place. Replacements were implemented.
Ofgem will publish a consultation on price cap plans, which will remain open until Tuesday 14 June 2022. If these reforms come into force, they will be implemented from October 2022.
The Queen’s speech, delivered today by Prince Charles to set out the government’s legislative timetable for the next parliamentary consultation, included the main points of an energy securities bill. The goal is to protect consumers from sharp increases in value through an extension of the official value of power. Ceiling regime beyond 2023.
The bill will also encourage the country to switch to renewable energy sources and inspire families to install heat pumps as an alternative to classic heating methods that rely on fossil fuels.
However, critics have advised the government to take more urgent action to ease the cost-of-living crisis in general and rising energy expenses in particular. The government responded by claiming that there was no short-term solution.
There are fears that the next version of the value cap, which will be announced through regulator Ofgem in August and implemented in October, could reach £3,000 per year from its current point of £1,971 for typical families (see stories below). ).
The price cap is a transitory measure introduced in 2019 to prevent energy suppliers from making large profits. The turbulence in the market since the increase in wholesale prices in early 2021 necessitated its extension to protect consumers from full costs, hence today’s announcement.
Currently, the limit is adjusted twice a year, in April and October, but Ofgem proposes to adjust it further if market situations require it.
The UK is proposing to expand its Warm Home Discount programme in Scotland, adding around 50,000 more families to the 230,000 already receiving payments.
The payment of £140 for electricity costs in winter would also increase to £150, and more suppliers would be encouraged to participate. The plan would also run from 2025 to 2026.
The aim is to align the Scottish plan with the plans of England and Wales.
The government said: “The Warm Home Discount in Scotland will continue to focus on means-tested benefits such as Universal Credit and pension credits, making sure cuts are passed on to those on lower incomes.
“Energy suppliers would possibly use additional eligibility criteria, provided that the criteria identify families at risk of energy poverty, subject to approval through (energy regulator) Ofgem. “
You can read more about the Warm Home Discount program here, eligibility criteria.
In an interview with the BBC, Keith Anderson, director of Scottish Power, reiterated his call for vulnerable families to get a £1,000 cut in their energy costs in the autumn, a charge that will be covered by a £40 increase in the annual charge. expenses for other energy consumers for five years, starting in 2023.
Anderson first made the proposal when he asked a question in Parliament last month (see article below). It is estimated that up to 10 million families are at risk of energy poverty when the next adjustment to the Ofgem value limit is made in October. .
He is concerned that the limit is too low, as Ofgem will use existing low fuel costs in its calculations, while many suppliers have already paid high costs for their long-life materials recently.
If the cap prevents providers from recouping what they’ve already spent, Anderson said we could see more business bankruptcies, most of the 30 seen in the past 18 months.
This would result in significant additional prices in the system, which would eventually have to be added to customer invoices.
Experts recommend that October’s value limit could be between £2,500 and £3,000 for typical users, a significant increase from its current point of £1,971.
Kwasi Kwarteng MP, Secretary for Business and Energy, today demonstrated that energy market regulator Ofgem is tracking the behaviour of suppliers in relation to excessive increases in direct debits from visitors, with really high fines most likely if companies continue to transgress.
In a tweet this afternoon, Kwarteng subsidised what many consumers have said in recent weeks that suppliers have demanded normal invoices at a point above what could be justified due to Ofgem’s value limit that accrues on April 1.
The cap has risen to 54%, adding almost £700 to typical annual energy expenses for those paying a variable dual-fuel rate via direct debit. The existing average value of £1,971 is expected to increase in October, when the next Maximum Cap revision is implemented, due to high wholesale values.
Kwarteng tweeted: “Some energy providers have higher direct debits than required.
“I can verify that Ofgem has compliance reviews today. Providers have 3 weeks to respond.
“The regulator will not hesitate to achieve rapid compliance, in addition to the imposition of really large fines. “
Ofgem first raised the malpractice factor in April when its boss, Jonathan Brearley, said: “We are seeing worrying symptoms that some businesses are reacting to those adjustments (in market prices) by allowing visitor service levels to deteriorate.
“Concerns have been raised that some providers may have higher-than-necessary direct debit bills, or guide consumers to rates that may not be in their most productive interest.
“When families are faced with large increases in their energy bills, the most important thing is that suppliers are held accountable and poor practices are temporarily corrected. “
Compliance reviews will come with stricter oversight of how pre-authorized invoices are treated and how much businesses have in customers’ credit balances.
Brearley said: “These paints will allow Ofgem to assess whether companies are complying with the conditions of their licence and work with them to address any shortcomings. If they don’t, we won’t hesitate to take swift action to enforce compliance. “in addition to the imposition of really heavy fines. ‘
Ofgem is also tackling the practice of corporations employing their customers’ cash in their businesses rather than buying energy. He says this is one of the fundamental reasons for the problems of many suppliers who have left the market.
Mr. Brearley said, “Customer credit balances deserve to be used solely to reconcile invoices, not as a risk-free source of capital. That’s why we’re looking at the option of separating credit balances and renewable energy-like bills so that they are in the event of a supplier default. “
Around thirty companies have gone bankrupt since the beginning of 2021.
The CEOs of some of the UK’s largest electricity corporations are calling on the government to provide urgent, concrete money to consumers facing massive increases in their bills.
Speaking at a meeting of the Parliamentary Select Committee on Business, Energy and Industrial Strategy, Keith Anderson, director of Scottish Power, told MPs that the current affordability crisis “has a length and scale that goes beyond what the industry can handle”.
Energy prices rose 54% on April 1 as the market price cap, set by regulator Ofgem, was raised to take into account emerging wholesale prices in recent months. Average annual expenses are now around £2,000.
The cap is expected to increase further on Oct. 1 due to the effect of the war in Ukraine on energy supplies. Anderson said the effect of the October limit update would be “horrific. “
One proposed intervention is the creation of a “deficit fund”, which would remove £1,000 from the annual expenditure of consumers deemed to be in energy poverty or with an early payment meter. This fund would then be repaid over 10 years across all energy consumers. .
Anderson said the short-term measure will lead to the creation of a reduced social tariff, for other people in energy poverty and for those with an early payment agreement.
Michael Lewis, director of Eon, said the government could also remove VAT from energy expenditures (it is charged at 5%) and transfer environmental taxes from expenditures to the general tax burden. Taken together, these measures can average annual expenditure at £250. at £300.
Other measures could include extending the Warm Home Discount, valued at £150 a year next winter, to more people, and extending the £200 energy rebate to be paid through the government to all UK household electricity accounts in the autumn.
Lewis also called for requiring the deployment of smart power meters to help power across the market.
Chris O’Shea, chief executive of Centrica, which owns British Gas, said regulation of the sector needs to be reviewed to avoid long-term business failures. Around 30 electricity corporations have gone bankrupt in the last 12 months, and the resulting administrative prices added £68 to the constant prices paid through each energy customer.
O’Shea told the party-wide committee of deputies that he feared there would be more business next winter, with the grim possibility that they could overshadow what came before.
Energy chiefs expressed support for last week’s announcement through regulator Ofgem that they would implement stricter controls to prevent corporations from using their customers’ budgets in their businesses.
They also supported measures to prevent electric corporations from disproportionately expanding direct debits from visitors and to prohibit them from switching their consumers to constant price lists that cost more than the popular variable-rate price lists.
Ofgem has threatened to impose really heavy fines on those who break its rules.
The all-party Committee on Economic, Energy and Industrial Strategy will today ask representatives of four major electricity companies about the offers they are offering their consumers following a 54% increase in average expenditure on April 1.
The CEOs of Centrica (which owns British Gas), E. ON, EDF and ScottishPower will meet MEPs this morning at 10. 30am.
MEPs are expected to focus on suppliers that have the highest direct debits beyond a point compatible with the new energy value limit of £1,971 per year for average consumption.
It has also been reported that consumers are forced to go to hotels to pay fixed rates instead of variable rates, which are controlled by a cap.
MEPs will also ask employers how they will implement the government’s electricity safety strategy (see article below). Other issues on the calendar include the £200 electricity bill relief scheme coming into force in the autumn, the long term of the value cap and whether the market will remain competitive.
Also expected to appear before the committee are the heads of bankrupt suppliers Bulb and Avro, who will come under intense scrutiny for control of their corporations before they went bankrupt last year.
A significant portion of this month’s cumulative value cap is attributed to the burden of reallocating consumers from the 29 corporations that have closed since the energy crisis began to be felt last summer with a sharp rise in wholesale values.
The Committee says the bankruptcy of Avro, which closed its doors due to a £90 million debt to its customers, expects consumers to lose £700 million.
Bulb was well nationalised (placed under a special scheme overseen through the regulator, Ofgem and the government) after it was deemed too big to fail. The government is looking for a client to take care of him amid reports that his life plan could simply reach £3bn.
The government has published its UK Energy Security Strategy, which focuses on moving towards low-carbon generation and strengthening the UK’s energy self-sufficiency over the next 10 to 15 years. But the initiative does little to address urgent considerations about energy affordability amid the ongoing cost-of-living crisis.
The government says, “Consumer expenditures in this decade will be lower than they would otherwise be as a result of the measures taken by this government. “
Opposition MPs and customer advocates have called on the government to come up with an emergency budget to deal with the family’s currency crisis. Critics of the integrated strategic technique have also argued that more emphasis should be placed on achieving greater energy efficiency, for example by expanding subsidies. for the insulation of the UK construction park.
The new energy plan says the government will increase domestic oil and gas production in the short term, but this activity is unlikely to reduce the likelihood of another increase in the national energy price cap in October.
The cap, adjusted twice a year, reflects adjustments in wholesale energy costs. The October cap will take into account costs in the six months to the end of July, which are inflated by fears, in part because of the conflict in Ukraine.
The government’s ambition to decarbonise energy production will mean accelerating the deployment of wind power, new nuclear power, solar and hydrogen. He says this may result in 95% of electric power by 2030 being low-carbon; There is a legal responsibility for the UK to achieve net zero carbon emissions by 2050.
Some critics have warned that energy expenses, many of which rose by as much as 54% on April 1 following the price cap increase, could be reduced by £100 in the short term thanks to the removal of “green taxes”, which fund the environment. Friendly power initiatives.
The government’s strategy says nuclear generation – which it calls a safe, empty and reliable source of energy – will account for up to around 25% of the UK’s projected electricity demand.
A new government body, Great British Nuclear, is being set up to deliver new projects “as soon as imaginable in this decade”, including the Wylfa site on Anglesey. The strategy document states that up to 8 new reactors could be built.
Other plans include:
Ofgem, the energy market regulator, is “working with suppliers” following several reports of consumers failing to submit meter readings ahead of a 54% increase in their value limit, effective April 1.
Customers are looking to submit updated readings ahead of the price increase, which affects those on variable rate rates, so they can make sure they’ll be paying today’s lowest rate for the energy they’ll use in March.
The concern is that if they rely on their supplier’s estimate of how much energy they used, some of their March usage could be billed at April’s top rate.
The limit on prepaid meter charges will also increase tomorrow, but since consumers here take advantage of pay-as-you-go terms, there is no need to sign up for a meter reading.
In a series of tweets this afternoon, Ofgem said: “We are aware that some energy providers are now experiencing issues with their websites, preventing other people from recording meter readings or their online accounts. We’re talking to providers about this.
“Consumers experiencing disruption touch their provider without delay and take a picture of their meter reading if a high volume of taps prevents them from communicating.
“Providers will have to take all moderate measures to allow consumers to access their account information, aggregating meter readings. “
Several replies to the tweets pointed out that consumers should not contact their providers precisely because websites and phone lines are overwhelmed by the number of people seeking to contact them.
Anyone who wants to contact their provider should take a picture of their meters (gas and electric) and email it to their own account to have a usage history from Array.
This can then be submitted at a later date or kept on hand in case of an upcoming dispute.
Those who own smart meters will send their readings to their provider, but of course they can take and take a photo if they wish.
Those who profit from constant energy price lists will not see any updates to their spending starting tomorrow, as their offers are outside the scope of the price cap.
In another tweet thread, Emma Pinchbeck, from industry provider Energy UK, said internet sites were down due to the scale of visitor queries: “People are very concerned and of course they have realised that customer teams are saying today is the deadline. “to send readings.
“We’re just checking with members, but please note: a) some providers won’t apply new costs b) the maximum will take meter readings after today and have other measures in place to send them. Don’t panic, check the meter, keep reading – many providers have data on their Twitter.
“Meanwhile, the intermediate disruptions for industry and customer teams reflect the magnitude of the concerns. This shows just how scary those price increases are and what the industry has been telling the government: Higher fuel prices aren’t just a challenge for vulnerable customers, and more desires to be made.
Yü Energy Retail Limited, a company with 20,000 locations in the UK, takes over consumers from Whoop Energy and Xcel Power Limited, which closed last week (see article below).
As happens when suppliers go bankrupt, market regulator Ofgem launched a bidding procedure and named Yü Energy as the candidate for consumers of bankrupt companies.
Yü Energy is primarily known as a professional energy supplier, however, it has posted a reassuring message on its website to the 50 household consumers coming from Whoop: “Of course we were the other most productive people for the job. We have proven that we are capable of taking care of its source and we are committed to incorporating it. Yü Energy is a solid corporation with a long-term strategy and the ability to meet the existing demanding situations of the energy sector.
Domestic consumers will move to a tariff through Ofgem’s value limit (see stories below). Companies’ energy value lists are not governed by the value limit. Commercial consumers will benefit from a flat rate, the values of which will be announced in the coming days.
Anyone who needs to change providers can take the tour, although it is advisable to wait until the move is complete. Customers will not be charged any outbound payments if they switch to another provider. For more information, consumers can stop at www. . yuenergy. co. uk.
At this time, there are no lists of national values available under the existing price cap, which is in effect until March 31. On April 1, it will increase to 54% to account for the increase in wholesale prices.
The limit for a family with an average consumption of a dual variable energy tariff, paid by direct debit, will increase to £693, from £1,277 to just under £1,971. Consumers of prepaid meters will see an increase of £708. from £1,309 to £2,017, still for typical use.
Actual expenses will be decided through consumption, so the limit is not a restriction on how much a given customer will be charged.
Supply to consumers will continue as normal after the transfer to Yü Energy on February 19, 2022. They will be contacted in the coming days regarding the changes and will take a meter reading as soon as possible.
Two of the smallest in the electricity market, Whoop Energy and Xcel Power, have announced the cessation of their operations.
This brings to 28 the number of companies that have closed their doors since the current energy market crisis worsened last August with a rise in wholesale prices.
Whoop Energy supplies fuel and electricity to 262 visitor accounts: 50 domestic and 212 non-national. Xcel Power has 274 non-domestic fuel visitors.
According to the backup protocol controlled through Ofgem, the electricity market regulator, visitors will continue and the budget that domestic consumers have deposited into their accounts, where they are creditors, will be protected.
Domestic consumers will also exceed the energy price cap by switching suppliers. The price cap, currently £1,277 per year for medium-burn dual-fuel users, will increase to £1,971 on April 1 (from £1,309 to £2,017 for those with prepaid meters).
The existence of this cap has protected consumers from the worst effects of energy prices in emerging countries, although the upcoming 54% increase is unprecedented and expected to plunge millions of people into financial difficulty.
For suppliers, the limit they have allows them to sell at a loss, hence the catalogue of business bankruptcies in recent months.
Customers of Whoop Energy and Xcel Power Ltd will be contacted in due course through their new supplier, which will be decided through Ofgem. In the meantime, Ofgem’s recommendation to affected consumers is as follows:
• Wait until a new provider has been designated and contacted within the next few weeks before switching to another energy provider. • Take a meter reading when your new provider contacts you to complete the visitor transfer process. to the selected supplier and respect the budget that domestic consumers have deposited in their accounts, of which they are creditors, as smoothly as possible.
With the unexpected 54% increase in its internal value cap taking just six weeks, on April 1, energy regulator Ofgem announced two measures designed to stabilise the market and protect consumers from steeper increases.
Many companies are expected to be at risk of bankruptcy due to the persistently high price of fuels and electricity in wholesale markets.
The cost of redistributing consumers from the 26 corporations that have gone bankrupt since the crisis deepened last summer is estimated at £4 billion, which will be passed on to consumers’ bills.
The first step will be to require providers to provide all of their rates to existing consumers as well as new consumers, rather than offering unrealistically reasonable offers to new consumers to advertise their business.
According to Ofgem, this will “stabilise the market in the short term by acting as a brake on unsustainable price festivals when cheaper price lists return and visitor switching resumes”.
“It will also restrict price discrimination by suppliers and support customer confidence in the retail market after the challenges of this winter, by gaining better access to cheaper price lists for customers who would likely be less willing or less able to transfer suppliers, especially those in vulnerable areas. Regions. situations. “
The second measure is the possibility of imposing a market stabilization fee if wholesale prices fall, especially after the entry into force of the new price ceiling.
This would make companies that gain new customers pay fees to those that lose business, to mitigate the high effects of wholesale price volatility.
Ofgem admits that, if activated, it will reduce “to some extent” the cheapest price lists found on the market. He adds: “However, active consumers looking to switch will still be able to see significant savings. “
In addition, the expected relief in the number of businesses closing will increase upward pressure on bills.
Both measures are scheduled to be phased out in the autumn, when Ofgem hopes to introduce further reforms to its price cap mechanism.
These come with the advent of quarterly reviews (currently, the cap is reviewed every February and August, with adjustments taking effect in April and August) and relief in the current era where providers must give their consumers two to a month.
Households will get credits for their energy expenses by restricting their energy use at peak times this winter, as part of a new National Grid plan.
The National Power Grid Operator (ESO) is partnering with Octopus Energy to see if, between February 11 and March 31, it can better match energy demand to the source, and will offer unique “financial incentives” to participants.
Approximately 1. 4 million Octopus Energy customers equipped with smart meters will be eligible for rewards if they reduce their energy consumption below what they would normally use between any of the two-hour intervals each day during the two-month trial.
The two-hour window on both days (00:00, 9:00-11:00 or 16:30-18:30) will be announced the day before at 16:00, giving interested parties the opportunity to signal or cancel the subscription. Those who sign up will earn up to 35p of free energy for one or both kilowatt-hours (kWh) they don’t use.
The test can reduce energy consumption by up to 150 megawatts (MW) each two-hour event, or 75 megawatt hours (MWh). As a reminder, the average UK household consumes around 15,000 kilowatt hours (kWh) of fuel and electricity per year, the equivalent of 15 MW.
ESO will use the data collected in the pilot to explain its plans to run a zero-carbon grid for certain periods until 2025 and a fully decarbonised grid until 2035. He hopes the data will allow him to balance consumption and demand more effectively, with savings. . transmitted to households.
ESO’s Isabelle Haigh said: “Encouraging families to engage on exciting climate-friendly energy opportunities like this trial will be part of our transition to net zero.
“The flexibility of the formula is imperative to manage and reduce peaks in electricity demand and ensure the security of electricity supply in the UK.
“This trial will provide valuable insights into how suppliers could use national flexibility to help reduce pressure on higher formula demand, reduce balanced pricing, and deliver benefits to consumers. “
The trial comes less than a week after energy regulator Ofgem announced a 54% increase in its energy value cap for 22 million homes in England, Scotland and Wales, from £1,277 to just under £1,971 for those with average consumption levels.
This means that a family whose average consumption benefits from a variable dual fuel tariff, paid by direct debit, will pay an additional £693 for energy from 1 April.
The government responded to this unprecedented backlog by declaring £350 worth of aid for around 30 million families, adding £150 council tax relief and a £200 loan to be repaid over five years from 2023.
As consumers reel from yesterday’s 54% increase in the energy value cap (see articles below), the government has published an article – Busted: The nine Big Myths About Energy in the UK – aimed at dispelling “some of the popular myths around emerging energies”. energy values in the UK.
The effect of increasing the value limit will be to increase average annual expenses from £1,277 to £1,971 (from £1,309 to £2,017 for those with prepaid meters).
The magnitude of this increase, while widely expected, has come as a huge surprise to the nearly 30 million families who will be affected.
The government’s proposals to cushion the blow – a £200 cut in spending in October (to be repaid over five years) and a £150 cut in council tax (which it does not want to be refunded) for those in brackets A to D to coincide with the cap increase in April, They have been described as insufficient and misguided by client teams and opposition parties.
Some have called for more money to be spent on eliminating energy poverty, when energy prices push a family below the official poverty line.
Commentators point to Shell’s huge accumulation of operating profits (up to £12 billion by 2021, also announced) and urge the government to impose a providential tax on energy production corporations that have profited from rising costs in wholesale markets.
There is no indication that the government is taking such a step.
We publish the government article below to give an idea of the official thinking on the energy market and added our own comments on “myth”.
“No, the increase in energy costs is the result of a global increase in fuel costs, which has several causes, in addition to the rebound in global demand as COVID-19 containment measures are eased and increased demand for liquefied vegetable fuel in Asia.
“In fact, the energy price cap continues for millions of consumers and ensures that they pay a fair price for their energy, despite the sudden rise in wholesale energy prices.
“But in light of ongoing cost-of-living pressures, the Government has announced a package to help families with emerging energy bills, worth £9. 1 billion between 2022 and 2023.
“This includes:
“Devolved administrations are also receiving an investment of around £715 million through the Barnett formula, as usual, where the UK government does not cover Scotland, Wales or Northern Ireland. “
Critics say that, even if a family receives the full £350, it will only be part of the typical increase in spending from April 1: adding £200 in the form of a loan in October that will have to be repaid. at £40 a year, top spending for five years, from 2023.
There are also concerns about the management of the program, with suggestions that some people who don’t get the loan will still have to pay higher expenses if they feed clients in the coming years.
“No, because the limit on the value of energy is still in place for consumers. “
We say: electric corporations will not apply rates higher than the cap of the popular variable rates. But the cap is widely expected to be raised again when it is reviewed in August for implementation in October. If the public budget does not inflate prices, consumers will continue to face an additional increase in their bills.
“Neither oil and fuel companies nor energy source companies will gain financial advantages from the announced new systems and all the money will be returned to domestic energy consumers. “
We say: the energy value limit is structured in such a way as to prevent energy suppliers from making excessive profits; That was the concept when it emerged in 2019. But the impression remains that consumers are bearing an unfair burden in an era of higher wholesale values.
“As a commodity that is traded around the world, fuel is exported and imported based on value signals. Generally speaking, the UK imports more than it exports.
“The UK continues to ensure high security of fuel supply, benefiting from a wide range of sources, adding one of the largest import infrastructures for liquefied vegetable fuels in Europe. “
Critics point out that the UK’s fuel storage capacity has been drastically reduced in recent years, leaving the country exposed to short-term price fluctuations as there is still no option to pay market rates to supply.
“Shutting down coal-fired power plants increases energy prices. In line with our net-zero emissions goal, the government has committed to phasing out coal-fired electric power generation by 2024. Shutting down coal-fired power plants before this date is a business resolution for the corporations involved.
We say: the government will have to balance its commitment to transition to a net-zero carbon economy by 2050 with a desire to “keep the lights on” in the meantime. As that date approaches, you will be forced to take more difficult measures. decisions on the use of carbon-based fuels, adding natural gas.
If credible and reliable opportunities for fossil fuels are not created in the short term, fuel will most likely remain a component of the mix, with all that this means for domestic bills.
“Roughly some of the UK’s fuel source comes from domestic sources, and the UK fuel sector has maximised production as much as you can imagine over this winter.
“Most of the imports come from reliable suppliers like Norway. We also have one of the largest liquefied vegetable fuel (LNG) infrastructures in Europe.
“We are also working with oil and fuel operators in the UK to expand more fields. Three new fuel streams were launched late last year, and more to come. However, the main points influencing fuel are due to foreign activity outpacing British domestic production.
“In 2020, less than 3% of our fuel came from Russia. “
We say: the personal corporations that extract fuel from the North Sea and other fields in the UK sell their products on the open market where they can get the most productive price. They are not required to sell on the UK market at a subsidised or controlled cost. , and it’s hard to believe that a conservative government is transforming that system.
“It is vital to note that wholesale fuel costs are faced around the world due to source and demand issues, with some countries in Europe in particular facing much more serious energy source security issues than the UK.
“The package announced by the Chancellor will allow millions of families to get up to £350 to help cover their living expenses. This is broadly in line with the maximum presented by our European neighbours and, in many cases, is more generous. “
We are saying that other countries are adopting other responses to the general challenge of maximum wholesale prices. For example, the French government has stated that energy consumers only see their expenses grow by up to 4%, with the national energy operator, EDF, being to blame for prices above this level.
However, since EDF is owned by the French government, those prices will most likely form part of the country’s overall tax burden, which, in a sense, can be seen as a monetary sleight of hand.
“Decisions about the extent of capital investment in production and how profits are paid to investors are business decisions of corporations. The UK remains an attractive destination for corporations to invest in oil and fuel production.
What we are saying is: the Conservative Party is anchored in the market economy. It’s hard to believe that any change, even if the clash in Ukraine, with the consequent disruption of fuel supplies, can simply mean that all bets are cancelled, at least temporarily.
“The government is redoubling its efforts to produce more energy and power in this country to meet the goal of decarbonising the UK’s electricity formula by 2035.
“Since 2010, we have increased the percentage of electricity generated from renewables from 7% to 43% compared to 2020, and our most recent allocation cycle of the successful Contracts for Difference program is up to 12 GW of additional renewable capacity. be more than the last 3 rounds combined.
What we are saying is that the government has set very ambitious targets for green energy that will require sustained investment. Their progress on those measures will be closely monitored, either through the green lobby or those involved in security of supply.
The government is already grappling with the effects of the crisis, which most likely includes a rise in loan prices following yesterday’s hike in the bank rate to 0. 5%, an increase in National Insurance contributions from April, and inflation above 5% that is expected to rise. It will achieve 7% in the coming months.
Increasing the energy value limit adds to their problems, and there will be negative reporting circulars when the value limit increase goes into effect on April 1. We can probably expect to receive more messages of this nature in the coming weeks. .
Almost 30 million families will benefit from cost relief and rebates of up to £350 following the 54% increase in the energy value cap announced above (see article below).
Chancellor Rishi Sunak told the House of Commons this morning that all domestic electricity consumers will get £200 towards their energy costs from October. In addition, 80% of families will get a £150 rebate on council tax from April.
Energy providers will apply the relief to 28 million domestic electricity consumers starting in October, and the government will cover the costs. The relief will then be recovered from individual expenses in instalments equivalent to £40 over the next five years.
This will start from 2023, when the government will claim that wholesale fuel prices globally (the main reason why the maximum value has increased by 54%) fall.
English families in municipal tax brackets A-D will benefit from a £150 discount, paid directly through local government from April. This will not want to be refunded. The government is also making £144 million in discretionary investments available to other vulnerable and low-income people who do not pay council tax or who pay for homes in the E-H bands.
The transferred governments of Scotland, Wales and Northern Ireland will get around £565 million in investment thanks to the energy council tax break in England. Northern Ireland will get a further £150 million in investments for energy bill payers.
The Chancellor also showed her goal to maintain existing proposals to increase eligibility for the Warm Home Discount to almost a third, until 3 million vulnerable families now benefit from it. The planned increase from £10 to £150 from October has also been shown.
The energy price cap, which limits the amount businesses can qualify per unit of fuel and electric power supplied to domestic customers, as well as constant prices, will increase to 54% on April 1, 2022.
This means that the peak for a family with an average consumption of a popular dual-power variable tariff, paid by direct debit, will rise to £693, from £1277 to just under £1971. The actual expenses will be covered with our minds through the amount of energy used.
Prepaid meter consumers will see an increase of £708, from £1,309 in 2017, even for typical use.
The cap applies to around 22 million homes in England, Scotland and Wales. Northern Ireland has a value limit.
The increase was due to wholesale fuel prices remaining high in the six months to the end of January, the term used by Ofgem, the market regulator that sets the cap, to what should be the new point. Once in place from April, the cap is expected to remain at the same point until the end of September, when it will be adjusted again.
However, Ofgem is due to unveil measures later this week that could allow it to make changes more occasionally than every six months. He said: “Other measures come with Ofgem’s ability to update the maximum value limit more on a regular basis than once. every six months in exceptional cases to ensure that it reflects the actual cost of energy supply. “
The price of wholesale fuel has been such that around 30 energy providers have closed their doors in recent months as their consumers shift to larger competitors. The effect of the cap on preventing suppliers from charging enough to cover the cost of purchasing fuel in bulk. , which led them to run at a loss.
Gas costs have risen in overseas markets due to strong post-Covid lockdown demand. Alternative energy sources, such as wind, solar and nuclear, have not been able to meet the needs.
The government is due to announce measures today to help suffering families cope with the large increase in costs. Chancellor of the Exchequer Rishi Sunak is due to hold a press conference tonight, in the hope that it will provide the main points of a fund with which electricity companies can borrow money to reduce the volume of emerging spending.
But since this is a loan, it is believed that expenses would have to remain artificially high, even after the end of the fuel crisis, to finance repayments.
Ofgem, the energy market regulator, is expected to announce the next point of its price cap (Thursday, February 3). The cap, which determines how much energy companies can qualify for according to the unit of fuel and electric power they supply to domestic customers, will be adjusted on April 1 and remain at the new point until Sept. 30.
According to reports, the announcement planned for next Monday has been brought forward because the government needs to come up with a package of measures to help suffering energy consumers.
The cap is expected to increase specifically from its current point of £1,277 per year (for average families with a combined fuel and electricity tariff payable in arrears) to around £2,000 per year.
The limit for households with prepaid meters, which lately stands at £1,309 per year for average consumer users, will also increase dramatically.
Currently, there is no cheaper option for the cap, which means that consumers who don’t benefit from fixed-rate offers no longer have the option to pay for it. If the limit increases as planned, providers might have a chance. reduce it, but this can also prove difficult, as has been the rise in wholesale energy prices over the past year.
The accumulation of the cap will push many households’ budgets to the limit and beyond. In response, the government is expected to announce a package of measures to consumers, likely as early as Thursday afternoon.
We will provide the main points as soon as they arrive.
British Gas is taking care of Together Energy’s retail consumers after the Bristol-based company closed its doors last week (see article below).
The move was announced through Ofgem, the energy market retailer, which manages a safety net in the event of a company’s bankruptcy. Together Energy, which also uses the Bristol Energy brand, has 176,000 domestic consumers and 1 customer.
Through the safety net, money that current and former domestic consumers of suppliers have deposited into their accounts will be protected, when they are in debt. Domestic consumers will also switch to a British Gas tariff that is governed by Ofgem’s energy value limit.
There will be no interruption in the power supply. Together Energy consumers will be contacted in the coming days regarding the changes. If consumers wish to switch providers, they can compare prices, but are asked to wait until the switch is complete.
Customers won’t be charged an exit payment if they switch to another provider, although it’s highly unlikely they’ll find a tariff below the maximum price tier, which is £1,277 per year for a typical family with a dual energy arrangement. . .
Customers who want more can contact British Gas.
The long-suffering UK energy sector was dealt a blow today with the announcement that Together Energy Retail has ceased operations.
The company, which also manages Bristol Energy, has around 176,000 domestic customers and one customer.
Thanks to the protection controlled through Ofgem, the market regulator, the source of energy for consumers will be maintained and the budget that national consumers have deposited in their accounts, of which they are creditors, will be protected.
Domestic consumers will be transferred to a new supplier, whose new tariff will be through the energy price cap.
Customers will be contacted through their new provider in the coming weeks. This company will be selected through Ofgem following a tender process.
Ofgem’s recommendation to consumers is as follows:
Together is one of nearly 30 suppliers that have gone bankrupt in the past 12 months due to an unprecedented surge in global fuel prices.
The price cap means that suppliers must not pass on the full burden of energy payment to wholesale suppliers, meaning they are promoting at a loss to UK customers. Although there will be significant relief in wholesale prices in the near future, there may be more to come.
The current value limit is £1277 per year for an average customer household paying a dual fuel fee via direct debit. The new cap will be announced on Feb. 7 and go into effect on April 1.
Many analysts fear it could reach £1,900 or even £2,000, pushing many households’ budgets to the limit.
Of course, the government and power companies are looking for tactics to reduce the impact of any price increases on consumers.
The energy price cap that has protected many British families from the full effect of massive natural fuel price hikes this year could be updated under a restructuring by industry regulator Ofgem.
Rules are being adopted to ensure that the energy market situation does not collapse, after a year in which 28 energy suppliers went bankrupt. Part of the changes relates to a revision of the price cap.
It’s an unprecedented year for power company bankruptcies. Record costs for herbal fuel (an increase of more than 250% since January) have put pressure on smaller suppliers with limited reserves, forcing many to pull out.
Suppliers said they were hampered by Ofgem’s energy price cap, which prevented consumers from raising prices but prevented companies from passing on their emerging costs to bill payers.
Ofgem is investigating whether the price cap will be updated to better control market volatility.
The price cap limits the rates that a provider can apply to its default variable rates. These come with the constant rate and the value of the kilowatt-hour (kWh) of electric and gas. Ofgem sets a new limit for summer and winter, reflecting global wholesale values.
The new limit is announced in August and February, with the update going into effect in April and October. The most recent update increases by 12% on October 1, bringing it to £1,277 a year for a family with an average consumption point.
The next update in April will be based on an agreed formula that takes into account wholesale energy prices between August 2021 and January 2022; Most likely, they will increase. Some commentators have said that a price increase of between £300 and £400 is expected. .
The cap is expected to end until the end of 2023, but could be modified or removed more quickly in light of energy market turmoil in 2021.
Ofgem’s announcement to revise the energy price cap coincides with strong inflation.
Consumer value index inflation rose to 5. 1% from 4. 2% in November, according to data from the Office for National Statistics (ONS). The independent think tank Resolution Foundation said the figures were most likely to influence living standards and predicted inflationary pressures would continue. until early 2022.
Starting in January 2022, providers will have to go through currency stress tests to ensure they can cope with market pressures that could sink them if their finances aren’t strong enough.
Ofgem, which introduces the new rules, will step in when weaknesses become known and communicate with suppliers about their situation.
In addition to the monetary stress tests, supplier forums will be required to submit self-assessments of their control frameworks and report back to Ofgem. The watchdog will also review its existing criteria for “fit and fit” energy licenses.
Other measures shown by the regulator include exploring how to tighten regulations around credit balance protection, consulting on new financial licensing requirements, and the option of requiring providers to suspend expansion plans beyond certain milestones (such as 50,000 and 200,000 customers) until Ofgem is glad they do. They are stable.
Most of this year’s business bankruptcies affected fewer than 200,000 customers.
Jonathan Brearly, from Ofgem, said: “Today I am proposing transparent measures for us to subject suppliers to rigorous stress tests so that they cannot pass on irrelevant hazards to consumers. I would like to see more controls over staff in vital roles and greater use of knowledge to help us regulate.
He added: “Our priority has been and will be to act in the best interests of energy consumers. The next few months will be challenging for many, and we are collaborating with government and power corporations to mitigate the impact on as many people as possible. “possible, especially for the most vulnerable households.
Zog Energy, which has 11,700 domestic consumers, has ceased operations. Thanks to the protection of the regulator Ofgem, which comes into play on the occasion of the bankruptcy of a company, the source of energy for Zog consumers will continue and the budget that domestic consumers have paid into their accounts will be protected, where they are creditors.
Domestic consumers will also exceed the energy value limit when moving to a new supplier through Ofgem, as part of its Supplier of Last Resort Protocol. Customers will be contacted through their new supplier, who will be selected through Ofgem following a tendering procedure among other suppliers.
Update: Ofgem announced on Dec. 3 that Zog consumers would be purchased through EDF.
Ofgem’s recommendation to affected consumers is to wait to be contacted through EDF with their main tariff points and to take a meter reading as soon as possible to facilitate the moving process. It is not recommended to switch to a new seller when appointing a new seller.
In addition, existing market conditions mean that bids cannot be obtained at a price lower than Ofgem’s maximum price, meaning that an upgrade would not generate any monetary benefit.
Separately, Ofgem has appointed Scottish Power to take over consumers of Entice Energy and Orbit Energy, which closed last week (see article below). The 70,000 affected consumers will be contacted via Scottish Power in the coming days and weeks. There will be no interruptions all the way to the source and the rate at which they are moved will be controlled through the Ofgem value limit.
In a statement published on its website, Zog blames its resolution on the bankruptcy of its wholesale fuel supplier, Contract Natural Gas (see article below from 3 November). The statement reads: “Zog Energy was founded to supply energy to its consumers at the highest conceivable productive price for money.
“Throughout our lifetime, we have invested in the most cost-effective generation at prices and purchased our fuel in advance from Contract Natural Gas Ltd to deliver on the promise we made to consumers to supply undeniable and reasonable domestic fuel.
“However, Contract Natural Gas Ltd withdrew from the wholesale market and ceased operations. Unfortunately, the administrators of Contract Natural Gas Ltd are not willing to move the fuel hedges we had agreed in the past. This has put us in an untenable position, where we have to buy fuel at the existing market price and we still have no other option to avoid trading.
“Your energy source will now be transferred to a new supplier. Don’t worry; Your investment is safe and the budget you have deposited in your accounts will be safe if credited.
Bankrupt power company Bulb will be funded by taxpayers to the tune of £1. 7 billion after being placed under the Special Administration Scheme (SAR) through market regulator Ofgem.
The SAR procedure is designed to ensure that there will be no replacement at the source of Bulb consumers and to protect any credit balances they may have; Consumers have been urged not to take any action at this time. Anyone considering forgoing Bulb will most likely find that there are no competitive prices and that the best option is to stay put.
The administrator, Teneo, will run the business with the budget provided by the taxpayer until its future is settled, which may involve simply promoting it in whole or in part, or shutting it down and moving its customers to other businesses.
The government says it will work to recoup its expenses, “ensuring we get the bottom line for Bulb consumers and the UK taxpayer. “
Bulb is the first company to adopt the SA system, created in 2011 in anticipation of the bankruptcy of a primary supplier. With around 1. 7 million customers, it is more than 3 times the length of Avro, the largest company that has ceased operations in recent months.
The more than 20 electricity companies that have gone bankrupt since the summer have been subjected to Ofgem’s Supplier of Last Resort (SoLR) procedure, where a tender procedure is carried out to find a supplier of choice willing to settle for customers of the bankrupt company.
But the wholesale values are so high compared to Ofgem’s maximum value that it is believed that no supplier would be willing to take over Bulb’s business, which would mean that they would be operating at a loss.
Update: Entice Energy, which includes Entice Energy Supply Limited and Simply Your Energy Limited, and Orbit Energy announced (November 25) that they will cease operations. As with other default providers (see stories below), customer materials will be secured through Ofgem, as will any credit balances they have accumulated. Customers are kindly requested not to transfer providers, but to read their meter and wait for news from their new provider, appointed through Ofgem.
In a message to consumers on its website, Bulb said: “We will continue to operate as usual, so you won’t want to take any action. Your rates do not replace and the value limit applies to all consumers’ energy rates. If you pay to make your power consistent with the load, your load will continue to function normally. If you are in the process of switching to or from the bulb, your replacement will continue.
“We will continue to supply 100 percent renewable electricity and 100 percent carbon-neutral gas, and we will protect our partners’ national and advertising credits in the process. “
Fuel prices in foreign wholesale markets have recently reached record levels, and there are fears that a cold winter will lead to a sharp increase in demand. This will put further pressure on energy suppliers, who rate popular variable rate price lists above Ofgem’s value limit of £1,277 a year. year for a typical household.
Fixed fares, subject to the cap, sell for several hundred pounds more than the sliding fare cap.
The maximum limit is reviewed and adjusted twice a year. Most likely, at the next revision, in February, there will be a sharp increase reflecting wholesale prices. Some commentators recommend that it could reach £1,600 or more when the replacement is implemented in April.
Ofgem has announced extensive information on how the cap works (see article below).
Green energy company Bulb said it had made “the difficult resolution to place Bulb under special management. “This is the first time the agreement, designed through government and regulator Ofgem, has come into force following the bankruptcy of a primary energy company. has been used.
The move means Bulb is the largest company to fall since the energy market fell into crisis due to rising wholesale prices earlier this year. Bulb has around 1. 7 million consumers in the UK, making it the seventh-largest provider. Some 24 small suppliers have already ceased operations in 2021.
Bulb says a special management “is designed for Bulb members, making sure there’s no replacement at their source and their credit balance is depleted. “
The procedure means that Bulb will continue to operate as general and consumers will not want to take any action. The Special Administrator will be announced shortly. The agreement will remain in place – paid for through taxpayers – until Bulb regains its own monetary health, the business is sold or liquidated, and its consumers are transferred to some other supplier.
Bulb offers variable rate deals that are controlled via the energy value cap, which lately stands at £1,277 per year for families with typical usage. At this time, there are no value limits available elsewhere in the market, which means that Bulb is indeed not worth leaving given the protections afforded through the special management regime.
The length of Bulb means that it is unrealistic for another company to take care of its visitor base, as has been the case with more than 20 companies that have gone bankrupt in recent months under Ofgem’s “supplier of last resort” regime. In such scenarios no more than the maximum value of Ofgem (£1,277 a year for average households) is allowed to be valued, with many arguing that the point of wholesale values would force them to operate at a loss.
A notice at Bulb’s reads: “A special control has been designed to allow the Bulb to continue to operate as usual, so that you do not have to take any action. Your rates are not replaced, and the price cap applies to all consumers’ energy rates.
“If you pay for your energy according to the load, your load will continue to work normally. If you are in the process of switching to or from the Bulb, your replacement will continue. Smart meter installations and dashboards will continue.
An Ofgem spokesperson said: “Bulb consumers don’t want to worry – the bulbs will continue to function as normal. Ofgem works very intensively with the government. This includes Ofgem’s plan to go to court to appoint a director to run the business. Customers will not see any disruption to their source, their account, and their rates will continue as normal. Bulb staff will be on hand to answer calls and questions.
Bulb also stands out for its offer of 100% renewable electricity and 100% carbon-neutral fuel.
Energy market regulator Ofgem has published a series of consultations on the future of its value cap. The goal is to “ensure that the value limit reflects the costs, risks, and uncertainties faced by energy suppliers. “
This may simply mean that the limit would be adjusted more than every six months (in April and October), which is the current cycle.
Many suppliers claim that the cap cap (£1,277 per annum for variable tariff consumers with average usage and £1,309 per annum for prepaid tariff consumers with average consumption) is set too low in relation to wholesale market costs for electricity and, in particular, gases.
Companies claim that they are not able to transmit the actual load of energy, leading them to operate at a loss. More than 20 suppliers have ceased operations in recent months.
However, the limit has already been particularly higher this year (up to 9% in April and 12% in October), putting enormous pressure on household budgets. The Office for National Statistics and the Bank of England said energy costs are a key factor contributing to inflation. , which hit a 10-year high last month at 4. 2%.
The limit will be adjusted in April 2022, with the update to be announced in February. It is feared that this increase could increase an additional £300 to £400 in annual bills.
One of the published queries will read about whether the recent market volatility “has caused the point of the maximum value to deviate particularly from the effective load point allowed at the maximum value”.
In other words, Ofgem needs to know that the current level of the limit is sufficient to allow suppliers to cover their expenses and earn an agreed level of profit.
A second query will look at the process of updating the method that determines the boundary point. Ofgem is proposing to amend its licence to allow it to replace the limit outside the current six-month cycle from April to October in exceptional circumstances.
Here you will find more details about these and other queries about the technical aspects of the value limit.
Stakeholder perspectives on all facets of those documents are sought through December 17, 2021, and conclusions and decisions are expected in the new year.
Update 22 November: British Gas has been named a ‘supplier of last resort’ for consumers of Neon Reef and Social Supply, which stopped operating this month (see next article).
Two other power corporations closed, bringing the total number of delinquent suppliers to 24 in 2021 alone. This unprecedented market disruption is due to persistently high costs in wholesale markets, which suppliers are largely unable to pass on to their customers. consumers due to regulatory costs. cap (see stories below).
The last two affected are Neon Reef and Social Energy Supply. Last week, Ofgem indexed Social Energy Supply as one of the corporations that were in default in the energy market (see below).
Neon Reef approximately 30,000 domestic consumers with electricity and Social Energy Supply Ltd approximately 5,500 domestic consumers.
Under the safety net agreements maintained through regulator Ofgem, consumers of either corporation will see no disruptions to their sources and the budget entered into their accounts will be protected, where creditable. As is the case when a company is going to close, Ofgem will appoint a new supplier for each company’s domestic consumers, who will be protected by the energy price cap when switching to the new company.
This means that your new tariff will charge no more than £1,277 per year if you are a typical family with average usage (£1,309 for prepaid customers). The cap regulates how much suppliers can qualify per unit of fuel and electric power and for any current tariffs, so actual expenses are determined through the amount of energy used.
Since some consumers at failing businesses would have arguably benefited from less expensive offerings, they would likely see their expenses increase when they transferred to their new provider.
Ofgem will appoint new suppliers in the coming days following a tender procedure. The newly appointed companies will reach out to consumers to discuss the main points of the new provisions. Customers are asked not to transfer until the procedure is complete, but it is recommended that you read the meter as soon as possible to facilitate the procedure of moving from the old business to the new one.
Ofgem, the energy market regulator, has ordered five suppliers to pay more than half a million pounds they owe or face the waste of their licences.
Suppliers owe Ofgem a collective £575,000 in invoices, a government scheme that compensates owners of small renewable energy generators.
All energy providers are required to contribute to the feed-in rate program as part of their license conditions, but five providers missed the Nov. 10 deadline to submit bills this week.
The largest percentage of missing bills is due through Orbit Energy (£451,296), while the rest of the debt is owed through Delta Gas and Power (£46,701), Social Energy Supply (£28,735), Simply Your Energy/Entice (£28,353) and Whoop Energy (£19,013).
Ofgem has asked suppliers to pay what they owe or face enforcement action that could have monetary consequences or the withdrawal of their license.
The demand comes at a difficult time for smaller utilities struggling to keep up with emerging wholesale prices, especially for natural gas, whose value has risen 250% since the start of the year.
Twenty providers have closed since the summer and six were added this month, affecting more than two million home energy customers.
Affected consumers do so through Ofgem’s safety net, which secures their supply, transfers them to other suppliers’ books and keeps the cash they have paid in their accounts, where they are creditors.
Enterprise customers who halt their operations are requested to move until the switch to the new provider designated through Ofgem is completed.
In accordance with its ‘safety net’ protocols in the market, energy regulator Ofgem has appointed suppliers to take over the power source for consumers of corporations that have recently shut down due to adverse market conditions, basically skyrocketing wholesale prices for vegetable fuels.
Ofgem, which regulates domestic and advertising providers, says the adjustments will affect 70,600 domestic and non-domestic customers.
The announced adjustments include:
Ofgem conducts a competitive procedure to get the deal done for consumers. The procedure ensures that there will be no interruption in supply and that the supply of energy will continue as normal once consumers have switched to their new suppliers.
Funds paid through existing and previous domestic consumers into their accounts will be made through Ofgem, where consumers are credited. Domestic consumers will also go through the energy value limit with their new supplier, meaning they will likely pay no more than the existing limit (£1,277). for medium-use households) in its new tariff.
Customers whose suppliers have ceased operations will be contacted in the coming days regarding the changes. If consumers need to switch providers, they can shop around, but Ofgem advises them to wait until the switch is complete.
It is important that they read the meters as soon as possible, as this will make the transfer to the new provider less complicated.
If, when the time comes, consumers transfer suppliers, they will not be charged any exit fees.
Neil Lawrence, Chief Retail Officer at Ofgem, said: “We sense this news may be unsettling for customers, but they don’t need to worry. Your energy source will continue as credit balances for general and domestic customers, as well as some non-national customers. Credit balances will be honored.
“Your power source will be interrupted and your new provider will contact you in the coming days to provide additional information. If consumers need to switch providers, they can compare prices if they wish, but they are asked to wait until the move is made. “complete.
CNG Energy Limited, an advertising energy provider with approximately 41,000 non-domestic customers, has shut down. A message on its site reads: “After 27 years, we are saddened to announce that CNG Energy Limited is ceasing operations. “
This news follows the demise earlier this week of electric utilities with household consumers (see article below).
As happens when electricity corporations go bankrupt, the regulator, Ofgem, will ensure continuity of supply to CNG consumers. However, the component of the Ofgem endorsement that guarantees the budget that domestic consumers have paid into their accounts will be protected, when they are on credit, does not apply in the case of CNG advertising consumers.
Similarly, while domestic consumers of a bankrupt supplier exceed Ofgem’s energy value limit when they switch to a new supplier, commercial consumers do not have this certainty.
The prestige of CNG consumers in terms of credit balances and price lists will be decided through their new supplier, who will be appointed through Ofgem in the coming days.
CNG consumers are kindly requested not to switch suppliers until they have been moved to their new supplier, but read the meters to make the switching procedure less difficult when that happens.
On a gloomy day for the UK energy market, four more energy suppliers shut down, joining Bluegreen Energy, whose demise was announced yesterday.
The latest to be affected by the crisis, caused by the sharp increase in wholesale energy prices over the last 12 months, are:
Thanks to Ofgem’s safety net, consumers’ energy source will continue and the budget that domestic consumers have deposited into their accounts will be in the place where they are creditors. Domestic consumers will also exceed the energy value limit by switching suppliers.
Customers of those suppliers will be contacted through their new supplier, who will be selected through Ofgem. See the story below to learn more about the procedure of switching to a new provider.
Ofgem, the energy market regulator, has announced that Bluegreen Energy Services Limited will cease operations.
Bluegreen Energy serves approximately 5,900 domestic consumers and a small number of non-domestic consumers. In a statement, he said: “Due to the energy crisis in the UK, we find ourselves in an unsustainable scenario and unfortunately Bluegreen Energy Services Limited is forced to make the difficult resolution to halt operations. “
Ofgem’s protection means that consumers’ energy source will continue and that the budget that domestic consumers have put into their accounts, where they are credited, will be protected.
Domestic consumers will be transferred en bloc to a new supplier, selected through Ofgem, in the coming days. The new tariff at which they will be transferred will not exceed the maximum price set by the regulator, which limits the amount suppliers can charge per unit of fuel and electricity used.
The existing limit is £1,277 per year for a typical average household consumption. How this cap is set is currently under scrutiny, with energy suppliers claiming it forces them to run at a loss due to high wholesale energy prices. But any increase in the cap when reviewed in early 2022 will put more pressure on already tight household budgets.
Last week, Ofgem announced a consultation procedure on how the cap works.
Ofgem’s recommendation to Bluegreen Energy consumers is to transfer suppliers at this time. He says they should:
Ofgem, the energy market regulator, has tasked Shell Energy Retail with taking care of consumers at bankrupt energy companies GOTO, Pure Planet, Daligas and Colorado Energy.
This resolution affects a total of around 275,000 domestic and six hundred foreign customers.
As with other visitor transfers (see stories below), any credit balance that domestic consumers have deposited into their accounts will be disrupted and there will be no interruption of supply.
Domestic consumers will benefit from a Shell Energy tariff capped by Ofgem’s energy value cap, which is currently £1,277 per annum for families per average amount of energy. Once the measure is complete, consumers can replace without penalty. Due to existing market conditions, such as the maximum price of wholesale natural gas, it is unlikely that transactions below the maximum limit can be made until early 2022.
Customers of all three providers will be contacted in the coming days regarding replacements. Ofgem says they are waiting for Shell Energy to touch them and not replace the corporations in the meantime.
GOTO Energy Limited ceases operations with immediate effect. The company supplies fuel and electricity to 22,000 customers nationwide. It is the 13th supplier to go bankrupt since September, as the UK market reels from skyrocketing wholesale energy prices.
According to the backup provisions monitored through the energy regulator, Ofgem, the power source for consumers will continue uninterrupted. Funds that domestic clients have deposited into their accounts will be where they are creditable.
Domestic consumers will be transferred en bloc to a new Ofgem provider. The new tariff presented to them will be protected by Ofgem’s energy value limit of £1,277 per annum for households with typical consumption. The amount of expenses will be covered with our minds through the amount of energy consumed.
The price lists implemented within the cap are currently the cheapest on the market thanks to the unprecedented wholesale value of energy in foreign markets. However, consumers are free to leave the new provider, without penalty, if they wish.
In the meantime, Ofgem’s recommendation to affected consumers is as follows:
Daligas Limited has announced the cessation of its operations. The announcement comes a day after the closure of Pure Pla and Colorado Energy, leaving 250,000 domestic consumers relying on protection from regulator Ofgem (see article below).
Dalifuel’s bankruptcy means that 12 energy suppliers have gone bankrupt since the beginning of September. All of them have been affected by the peak load of energy, especially vegetable fuel, in wholesale markets.
With 9,000 domestic and advertising customers, Daligas Limited, an all-gas company, is one of the smallest corporations in the sector, but today’s announcement will be seen as further evidence of the turbulence affecting the UK energy market as a whole.
In order to be able to offer reasonable prices while wholesale costs rise rapidly, companies will have to have purchased significant shares at affordable costs, a procedure known as hedging. Many small businesses with modest monetary resources have not been able to secure long-term sources and resources. They have found that existing spot costs are out of reach.
In addition, Ofgem’s price cap on how much businesses can qualify on its “predetermined” variable rate price lists means that companies cannot pass on the full cost of purchased wholesale energy to their customers.
As in previous company bankruptcies, the origin of Daligas’ domestic consumers will be guaranteed through Ofgem, along with the balance of their claims, until a new supplier is discovered to take over their activities. In the coming days, reports recommend that the remaining viable suppliers are increasingly reluctant to settle for new consumers en masse, as they would have to serve them at a loss.
If Ofgem is unable to locate a “provider of last resort” for a bankrupt company’s customers, it has the strength to appoint a special administrator to manage the bankrupt company until a permanent replacement can be found.
The costs associated with moving consumers to a new supplier would amount to hundreds of euros depending on the account, a charge that would eventually be passed on to all energy tariffs applied to the surviving suppliers.
The regulator says consumers of all bankrupt companies, Daligas adds, deserve to be reassured and not replace, but wait to hear from their new supplier. However, they will have to read the meter as soon as possible in order to be able to supply it to the new supplier in smart time.
Pure Planet Limited and Colorado Energy Limited have announced that they are shutting down their business operations. Pure Planet provides fuel and electric power to approximately 235,000 domestic consumers and Colorado Energy materials, fuel and electric power to approximately 15,000 domestic consumers.
This brings to 11 the total number of electric corporations that have gone bankrupt since the beginning of September due to pressures from rising wholesale costs (see articles below).
The market regulator, Ofgem, manages a back-up network to ensure the continuity of consumers’ energy source and the coverage of any credit on consumers’ accounts. Domestic business consumers will move en masse to new suppliers through Ofgem, where they will be through the energy price cap, which currently stands at £1,277 per annum for average dual-energy consumption families at popular variable rate default tariffs.
Customers will be contacted through their new supplier, who will be selected through Ofgem in the coming days.
Ofgem’s recommendation to those affected is as follows:
Ofgem says it is working intensively with government and industry to ensure consumers stay that way this winter. Neil Lawrence, Chief Retail Officer at Ofgem, said: “Our number one priority is to protect consumers. We know that this is a troubling time for many other people and that the announcement of a supplier’s bankruptcy can be unsettling.
“I need to reassure affected consumers that they don’t have to worry. With our safety net, we’ll make sure your power source continues. If you have credits in your account, the budget you’ve paid is and you possibly wouldn’t. lose the money you are owed.
“Ofgem will have a new supplier for you and in the meantime our recommendation is to wait for us to appoint a new supplier and not replace them in the meantime. You can depend on your power source normally. We’ll let you know when we do. ” We have selected a new provider, who will then let you know their rate.
Customers with questions should check out the FAQs on the Ofgem website.
Ofgem, the energy market regulator, has appointed E. ON Next to take over consumers of Enstroga, Igloo Energy and Symbio Energy, which announced last week that they would cease their trading activities (see below). This resolution brings the number of E. ON Next to 233,000 households.
The change, announced today, is effective as of yesterday. Ofgem promises that there will be no interruption of the source, as occurs when consumers switch to a new provider. All credit balances in the account are also protected. The regulator urges consumers not to switch providers until the switching procedure is complete.
Transferred consumers will be made through the energy value limit, which on Friday increased to £1,277 per year for consumers with the popular “default” variable rate that employs a typical amount of energy. Therefore, many consumers of ENSTROGA, Igloo Energy and Symbio Energy will see their expenses pile up if they benefited from a less expensive plan in the past.
However, the existing crisis in the energy market (see below) means that those less expensive bids have been withdrawn from sale, leaving the predetermined price lists governed by the cap as the lowest costs that can be obtained in most cases.
That said, consumers on the go can shop around and make transfers once their transition to E. ON Next is complete. Customers will not be charged an outbound payment if they transfer to another provider at that time.
Anyone whose replacement was already in progress when their original provider closed will receive their replacement.
More information on the following E. ON will be available:
Ofgem, the energy regulator, has announced that 3 more energy suppliers are going out of business. This means that nine corporations have closed their doors in recent weeks in reaction to skyrocketing wholesale energy prices, which meant they were operating at a loss (see articles below).
Today’s announcement lists Igloo Energy (179,000 domestic consumers), Symbio Energy (48,000) and ENSTROGA (6,000) as the most recent failures. Ofgem says that in combination they account for less than 1% of household consumers in the market. In total, nearly two million families have been affected by the recent landslides.
As part of Ofgem’s safety net, consumers of bankrupt businesses will continue to get fuel and electric power without interruption and accounts receivable credit balances will be honored when a new supplier is appointed for each business.
Domestic consumers of each operator will be transferred en masse to the estimated tariff of their respective new provider. This will be subject to Ofgem’s price cap of £1277 (from 1 October) for families with typical use.
New suppliers will contact consumers in a timely manner to provide them with more information. Ofgem typically designates “providers of last resort” within a few days. Meanwhile, no action is required on the part of consumers, beyond reading the meter as soon as possible. There is no need to move suppliers. This will be an option once the switch to the new provider is finalized.
Neil Lawrence from Ofgem said: “Our number one priority is customers. We know that this is a troubling time for many others and that the announcement of a supplier’s bankruptcy can be unsettling.
“I need to reassure consumers of ENSTROGA, Igloo Energy and Symbio Energy that they don’t have to worry. With our safety net, we’ll make sure your power source continues. If you have credits in your ENSTROGA, Igloo Energy, or Symbio Energy account, the budget you’ve paid is and you won’t lose the cash you’re owed.
“Ofgem will have a new supplier for you and in the meantime our recommendation is to wait for us to appoint a new supplier and not replace them in the meantime. You can depend on your power source normally. We’ll let you know when we do. ” We have selected a new provider, who will then let you know their rate.
“In recent weeks, we have noticed an unprecedented increase in global fuel prices, putting monetary pressure on suppliers. Ofgem is working intensively with government and industry to ensure consumers continue this winter.
Customers of bankrupt energy company Green Supplier will now be served through Shell Energy, energy regulator Ofgem announced. The 255,000 domestic consumers and a small number of non-domestic consumers take effect immediately, and Shell Energy will be communicating with those affected in the coming days and weeks.
Ofgem said Octopus had taken over consumers from Avro Energy, which announced last week that it was ceasing operations. Other corporations that have announced their closures in recent weeks include PfP Energy, MoneyPlus Energy, People’s Energy, and Utility Point (see articles below). .
As detailed below, Ofgem’s safety net procedures ensure continuity of the source of credits and protect account movement.
Customers of bankrupt companies will be transferred to “considered” contracts with their new supplier, with values controlled through Ofgem’s value limit.
Consumers of green suppliers can contact Shell Energy for more information: 0330 094 5804 or Green@shellenergy. co. uk.
More business closures are expected as suppliers struggle to cope with emerging energy prices in wholesale markets, and the energy cap restricts the amount of this additional charge they can pass on to their customers.
The government and Ofgem have issued statements assuring consumers that there is no risk when sourcing from the UK during the winter months.
Energy market regulator Ofgem has appointed Octopus Energy for the 580,000 domestic consumers of Avro Energy, which announced the cessation of operations last week. This resolution comes into force from today (26 September).
Green Supplier Limited also announced last week that it would cease operations. An announcement is expected in the coming days on which company will onboard its 255,000 consumers as part of Ofgem’s “safety net” process.
This ensures that consumers of a bankrupt electric utility will not experience any interruption in supply while their account is transferred to the new company, known as a “provider of last resort. “Any credit balance is also protected.
Octopus will be reaching out to Avro consumers in the coming days to provide them with information about the change. Customers will be transferred to a “reputable” contract with a maximum value consistent with the power unit in line with Ofgem’s maximum value.
From 1 October, this amount increases to £1277 per year for a family with an average consumption point, an increase of 12%. Given that many consistently cheaper deals have been withdrawn from the market, this is probably a smart price for cash at this time, many Avro consumers will inevitably find themselves paying more than before.
Once the transfer to Octopus is complete, Avro consumers can transfer to offer.
Ofgem says Avro consumers don’t want to cancel any direct debits they’ve made with the company. It says, “You don’t want to cancel your direct debit, but you can if you want. Octopus Energy will tap on it to locate it, find out if your existing direct debit will remain in place or if they will set up a new direct debit.
More can be found out at www. octopus. energy/avro and on the Ofgem website.
The government took the step of publishing a Q&A consultation to allow consumers to “learn more about energy costs and energy suppliers. “
At Forbes Advisor, they tackled those issues on this page and elsewhere, addressing vital issues like the default value limit and the safety net that ensures continuity of supply to consumers from failing energy suppliers.
But we thought it would be attractive for you to read the government’s statements on those issues, as they are published today. . .
You don’t have to be. Although global wholesale fuel prices have been high lately, we are confident that the safety of the UK’s energy source is guaranteed now and through the winter.
No, it isn’t. Even if your supplier goes out of business, Ofgem – the independent electricity regulator – will transfer you to a new supplier so that there is no interruption in your electricity supply.
It is not uncommon for energy suppliers to leave the market. There is a well-established formula to protect families and ensure the maintenance of their fuel and electric power.
Users of delinquent services who transfer to a new service exceed the energy value limit.
This is a government program that protects millions of people from surges in global fuel costs and limits the amount an energy provider can qualify to those with predetermined or popular variable rates.
Suppliers cannot qualify customers of delinquent suppliers with an amount higher than the maximum price.
Major energy suppliers also buy a large portion of their materials in bulk months in advance, protecting them and their consumers from short-term price spikes.
We will also offer many other systems to vulnerable and low-income households, adding the warm housing rebate, winter fuel payments, and cold weather payments.
The energy price cap is reviewed twice a year based on the latest energy price estimates and announced this summer that from October 1 the cap would increase due to emerging wholesale fuel prices.
However, the next time the value limit will be updated will be in April 2022, which means that the users it protects won’t have to worry about it expanding until then.
The capacity of the gas tank has little influence on the price of fuel. Some other countries buy fuel to ensure their own security of supply, but the UK benefits from access to a wide variety of secure fuel resources from the North Sea and from reliable import partners such as Norway.
Energy market watchdog Ofgem has ordered five small suppliers to pay around £765,000 they owe to a government renewable energy scheme. The finances of many energy suppliers are being squeezed by skyrocketing wholesale energy prices.
Colorado Energy, Igloo, Neon Reef, Whoop Energy and Symbio Energy did not contribute to the Feed-in Tariff (FIT) program, which supplies bills to homeowners of small renewable energy producers.
The ITF is designed to promote the adoption of small-scale, renewable and low-carbon electric power generation. Providers must pay dues to the program as a condition of obtaining their licenses, so the regulator, which administers the FIT program, asks that everyone pay their dues.
The deadline for payment is September 17. Colorado Energy still owes £261,406. 12, Igloo owes £316,582. 44, Neon Reef £37,350. 76, Whoop Energy £3,780. 22 and Symbio Energy £146,238. 66.
Ofgem says unfulfilled bills will delay bills to renewable energy producers. He warned the five suppliers that if invoices were submitted, they may simply take enforcement action that could include canceling their licenses or imposing monetary penalties.
Ofgem’s needs will put additional pressure on the finances of the corporations involved, at a time when the fragility of some energy suppliers’ capital resources is highlighted through emerging wholesale prices. Six smaller suppliers have gone bankrupt in recent weeks, including Avro Energy and Green Supplier Limited. They are now the fifth and sixth provider to close in recent years, affecting more than 800,000 consumers (see story below).
The other four providers that recently closed — PfP Energy, MoneyPlus Energy, People’s Energy, and Utility Point — had about 600,000 consumers on their accounts.
Affected customers’ accounts are transferred to one of the UK’s major energy suppliers as part of Ofgem’s ‘safety net’ procedure that ensures supply to households is cut off and credit balances are protected.
Ofgem has commissioned EDF Energy to 220,000 Utility Point and British Gas customers to do the same for People’s Energy consumers.
Amid growing fears of bankruptcies of more suppliers, Business Secretary Kwasi Kwarteng MP told Parliament last week that he would subsidise struggling power companies.
He said, “The government will not bail out bankrupt corporations. There will be no praise for failure or mismanagement. Taxpayers do not deserve to be expected to hold corporations with poor business models and are unable to cope with fluctuations in value. “
Kwarteng also said advice to return to blackouts and a three-day working week like in the 1970s was alarmist and unnecessary.
Avro Energy and Green Supplier Limited have ceased business operations, with the fifth and sixth energy suppliers shutting down in just over a week.
Avro Energy supplies fuel and electricity to approximately 580,000 domestic consumers, while Green Supplier Limited supplies fuel and electricity to approximately 255,000 domestic consumers and a small number of non-domestic consumers.
Together, they account for only 3% of the market’s domestic visitor base.
Ofgem’s support will ensure that there are no interruptions in the power source for business consumers and that important credit balances (of domestic consumers) are protected.
Domestic consumers will also have to exceed the energy price cap when switching to a new supplier as part of the regulator’s procedure in such situations.
Ofgem’s recommendation to Avro Energy and Green Supplier Limited consumers is as follows:
This will make the procedure of moving consumers to their selected provider and paying off notable credit balances as smooth as possible.
The taxpayer has to fund the operations of a US fertiliser manufacturer that has shut down two UK factories due to rising energy prices.
The move comes as the government grapples with a worsening energy crisis that has bankrupted several suppliers and threatened millions of consumers and businesses with higher energy bills. But he governed our state for energy providers facing insolvency and closure.
Four power corporations have ceased operations in recent days, with more expected to follow. Customers of delinquent suppliers are transferred to a new supplier, with no loss of source and with protected credit balances, thanks to a “safety net” controlled through energy. market regulator, Ofgem.
The government’s three-week deal with CF Fertilisers, announced through MP Kwasi Kwarteng, Business Secretary, will protect the source of CO2, which is a by-product of its production process.
CF Fertilizers produces around 60% of the UK’s CO2, which is used in the slaughter of animals such as poultry and pigs, in food packaging and in the production of convenience drinks, and has many programmes in industry, healthcare and nuclear.
Under the terms of the agreement, the government will provide “limited monetary support” to CF Fertilisers’ operating prices at its Teesside plant for three weeks “while the CO2 market adjusts to global fuel prices. “
Mr Kwarteng had earlier delivered a speech to Parliament in which he said: “We have enough capacity and more than enough to meet demand, and we anticipate sources crises this winter.
“Surely there is no question that the lamps will go out or that other people will not be able to heat their homes. There won’t be a three-day workweek or a return to the 1970s. Such thinking is alarmist, unnecessary, and surely wrong. “
However, under pressure for the government not to inject cash into energy suppliers to keep them afloat: “The government will not bail out bankrupt corporations. There will be no praise for failure or mismanagement. Taxpayers do not deserve to be expected to expect corporations with poor revenue to operate business models that are unable to cope with price fluctuations. “
As well as highlighting the merits of Ofgem’s backing, Kwarteng said the regulator’s energy price cap “leads nowhere” and would remain safe from “price spikes” for consumers.
The cap applies to popular default variable rates and prepayment rates and benefits approximately 15 million households. These rates are among the most expensive on the market, but emerging wholesale prices mean that cheaper fixed-rate offerings have been pulled from the market in many cases.
The latest edition of the Ofgem price cap comes into effect on October 1 and will remain in effect until March 31, 2022. The net effect of the cap is to protect the lists of securities involved from further increases in the wholesale energy rate.
This means that many suppliers will sell fuel and electric power to consumers at a price below cost, which is why more defaults are expected from suppliers.
The limit is expected to increase dramatically at the next adjustment in April next year. The new point will be announced in February and will reflect wholesale costs in the second part of 2021.
Kwarteng insists that reducing the number of suppliers should not bring relief to competition: “We will not have to return to the ‘comfortable oligopoly’ of years past, where a few giant suppliers simply dictated their terms and prices to consumers. “
For more facts on how to respond to the energy crisis, check out our stories below.
As the government holds emergency meetings with the power sector and commentators expect additional bankruptcies of small and medium-sized suppliers, consumers are in an era of concern. So what, if anything, is to be done?
Your course of action will largely depend on your existing energy agreements. Here are answers to some common questions to help you ensure you get the most productive price imaginable in a turbulent and troubled market.
If you’re unsure of your rate, or even the identity of your provider, look for a recent bill (or bills, if you have separate providers for electric and gas). Here you will find all the information you want about your energy company(s). ), as well as the main points of your tariff(s).
If you’ve never changed providers or haven’t done so in more than two years, you’re probably subject to a Default Agreement (SVT) – around 11 million families in the UK get advantages from one of those tariffs, the value of which you pay can be adjusted through your provider at any time, as long as they give you 30 days in advance of the increase.
Prior to the current price crisis, these open-ended predetermined contracts were some of the most expensive on the market, and it was advisable to upgrade them to a less expensive fixed-term, fixed-rate contract; Dozens of them were regularly available.
But that has changed. Right now, the default offers are some of the most competitive. You can combine an energy quote to see if anything cheaper is available, but chances are your most productive bet is to sit back and wait for prices to drop. drop.
The maximum costs of the predetermined price lists are governed by a limit controlled through Ofgem, the energy market regulator. This is adjusted every April and October, and next month it will rise by 12% to £1,277 for typical customer households, and providers are raising their costs to take full credit for this.
This accumulation is frightening; However, the crisis in the wholesale energy market is such that predetermined agreements are still very likely to be among the most advantageous among those available.
Prepayment price lists (around 4 million UK families have one) are also subject to an Ofgem limit. This amount will increase from £153 to £1,309 on October 1 (again for those with average intake levels).
It’s a good idea to check to see if there’s a cheaper offer, but as with default rates, you may find that you’re getting a competitive plan, even after the next price increase.
Some thirteen million families in the UK benefit from constant tariffs, where the value of the unit of energy used is fixed for a short period of 12 to 24 months.
Traditionally, these offer the most productive cost per money, with values several hundred pounds lower than the maximum value of Ofgem, and are guaranteed not to change, no matter what happens in the wider market. But in the past week, steady rates have skyrocketed. And many corporations have stopped offering them to new customers.
If you’re already using a patch, your most productive bet is almost certainly to stick around until the end. At this point, if you don’t do anything, transfer to your provider’s default sliding rate rate. But as your fee nears the end date, you can quote to see if there are any other, less expensive solutions you can migrate to (if you replace within six weeks of your fee’s end date, you may not pay any exit fees if your existing rate agreement charges them).
It may simply be that the default offer represents a smart price at the time, or you can ask your current provider if they offer a rate that would charge you less.
Remember, you can transfer from a variable-rate be be offer at any time without penalty, so if you opt for one, you can opt out if a less expensive be be offer is found elsewhere.
A small number of families benefit from “chosen” variable-rate offerings that, until recently, were priced lower than default variable-rate options. In fact, they were equivalent, or even cheaper, than fixed-rate offerings.
However, the costs of those competitive variable rates are higher, and many have been pulled from the market to attract new customers. So if you’re on one of those plans, you contact your provider to verify that they’re not offering a less expensive option.
If that doesn’t work, put together an electricity quote to see if there’s a higher offer, adding popular variable-rate offers.
We hear many hypotheses in the press that an organization of small and medium-sized energy suppliers could go bankrupt in the coming days and weeks if the government does not intervene with a radical package.
The important thing is that Ofgem, the regulator, prioritises continuity of supply, so it will ensure that the customers of any company that goes bankrupt are transferred to another supplier; This is called “security. “net’ that ensures consumers don’t lose power.
Again, the government says this is a tactic to make the backing as strong as possible. This may involve simply advancing state-guaranteed loans to inspire corporations to recruit consumers from delinquent providers.
If you’re worried about the viability of your energy supplier, switching to another company may not be the best solution right now. First, you may not be able to find a moderate rate, and second, your interests. You will still be protected through the safety net.
This is not meant to minimize the anxiety that such conditions can cause: learning that your provider has gone bankrupt will come as a shock. But it’s reassuring to know that there’s a formula out there to ensure any negative effects on your person. kept to an absolute minimum.
Energy market regulator Ofgem has appointed primary energy EDF to take over Utility Point’s 220,000 domestic consumers and arranged for British Gas to do the same for People’s Energy after the two smaller corporations went out of business last week (see story below).
When an electric utility goes out of business, Ofgem’s protection network protocols come into effect so that customers’ power supply is not interrupted and that all credit balances held with the company are protected. Part of the procedure involves the designation of a “supplier”. of last resort”, in this case EDF and British Gas, following a call for tenders between the suppliers concerned.
The move comes at a time when the energy market as a whole is experiencing unprecedented disruption due to skyrocketing costs for plant fuels and electric power in total retail markets (see article below). Many suppliers prevent marketing their products to new consumers because the costs are too high. In many cases, the cheapest bids presented are variable rate default rates, which are traditionally among the most expensive on the market.
The amount that providers can rate consumers based on the default rates is limited by the Ofgem value limit. This amount increases by 12% to £1,277 per year for a family with an average intake on 1 October 2021. The accumulation was calculated over the summer, before the current price crisis completely took over foreign energy exchanges and is now estimated to be much lower.
It is felt that this could limit smaller suppliers with fewer capital resources, leading to more company bankruptcies, consolidation of the market in the hands of larger suppliers, and ultimately reduced competition.
Ofgem is also likely to increase its limit by a significant amount at the next opportunity in April 2022, which could push it above £1,550 per year for average users.
The government is said to hold crisis talks with energy market representatives this weekend to ensure continuity of supply to households and businesses.
Ofgem’s recommendation to Utility Point and People’s Energy consumers is to wait for EDF or British Gas to provide them with personalised data on their new “presumptive” tariff in the coming days. Traditionally, “puted” rates have been more expensive than other rates. from the same company or in the broader market, but unless wholesale market prices fall drastically, this may no longer be the case.
However, once their new account is opened with their new provider, consumers of any of the bankrupt corporations can seek a less expensive energy deal if they so choose.
Ofgem said: “If consumers need to replace their tariff or transfer providers, they ask to transfer to another tariff or compare prices. You will not be charged any exit fees. Waiting for them (EDF or British Gas) to contact you will be the simplest way to honor domestic consumers’ credit balances with Utility Point/People’s Energy through EDF/British Gas.
Regarding consumers paying by direct debit, Ofgem said: “You don’t want to cancel your direct debit, but you can if you want. EDF/British Gas will contact you to find out if your existing direct debit will remain in place or if they will set up a new direct debit.
Utility Point consumers with smart meters have been informed: “Some consumers with newer smart meter models do not see any loss of smart functionality. Unfortunately, consumers with older smart meter models will see a loss of smart functionality, but their source will continue uninterrupted. EDF will retrofit those aging meters for any visitors who request them. Once the switch to EDF is complete, they will take steps to repair its functionality.
Utility Point consumers with additional questions can consult EDF’s website or call 0333 009 7120.
People’s Energy customers stop at the British Gas website or call: 0333 202 1052 (if they have a credit meter, where they pay by month or quarter in arrears) or: 0333 202 9742 (if they have a pay-as-you-go meter). go metro). .
The UK energy market is going through turbulent times, and this turbulence will inevitably translate into higher national energy bills. Here’s a look at what’s happening, how it may affect you, and what steps you can take. . .
And they’re reaching record levels. Energy corporations naturally seek to pass on their higher prices to their customers, so what happens in wholesale markets affects domestic and commercial customers sooner or later.
How and when you’ll see the effect will depend on the type of electric rate you have and how your supplier buys your materials in bulk. . .
Ofgem’s cap limits the amount businesses can rate their consumers based on the default rate: around 11 million homes in the UK. This cap is higher, about 12% on Oct. 1, to allow suppliers to qualify more due to higher wholesale prices.
Unfortunately not. Ofgem made its calculations based on how wholesale costs would be recovered during the summer and what would happen during the fall and winter. It turns out that he underestimated the speed and magnitude of the increases.
The newly calculated limit is based on a fuel value of £63 per therm; In the last few days it has risen to £177 per therm, with a 12-month ‘upfront value’ (what you pay if you spend a year buying in advance). Up to £135 consistent with Therm.
With electricity, the price corresponds to electricity used through Ofgem £70, but has risen to £181 and has traded at £140 over the last year.
What is certain is that the next revision of the cap in February (which will come into effect in April) will be a further leap forward, as Ofgem is cautious at this level and will drive a significant increase.
Some won’t. As you can read in the stories below, four energy providers have gone bankrupt in recent days and more are at risk of doing so in the coming weeks and months.
But as we also explained, no one will run out of supplies. Ofgem’s safety net means that consumers are transferred to some other provider.
The crisis in the domestic market is such that most suppliers have withdrawn most or all of their contracts; they just can’t settle for new customers. But we can expect more deals to close in the market once wholesale costs stabilize, as they most likely will once the source issues are resolved.
If you have a fixed rate and have a few months left, it’s probably more productive to step back and see what market conditions look like as you approach the end of your term.
If your solution is coming to an end, keep checking the market to see if you can find a moderate offer. And contact your current provider to see what they can offer you, whether it’s in terms of a replacement patch or in terms of your default price. As previously stated, default could even become the most productive bet at the moment.
If you get advantages from a variable rate, then it’s a matter of looking for competitive deals, either from the variety of the market or from your current provider.
Two other smaller electricity corporations, People’s Energy and Utility Point, have ceased operations as of today, confirming the chilling effect of the UK’s skyrocketing electricity market. Last week, PFP Energy and MoneyPlus Energy also closed their doors (see below).
Market commentators say emerging prices will lead to more losses among utilities this winter. Here you can find out what happens if your energy provider goes bankrupt.
Market regulator Ofgem advises the roughly 500,000 consumers of People’s Energy and Utility Point not to take any action until it has appointed a new supplier. Affected families will not enjoy any supply interruptions and credit balances will remain in place.
Once the new provider is appointed, consumers will be able to transfer to the provider if they wish.
On its website, People’s Energy said, “We are saddened to inform you that People’s Energy is ceasing operations. Rest assured that your energy source is safe and that credit balances on the accounts of all domestic members are protected. This includes all recent major increases made as a component of the seasonal weighting initiative.
“Ofgem, the energy regulator, will appoint a new supplier for all our members. Their recommendation is not to change, but to wait for them to appoint a new provider. This will lessen any threat of source disruption and make it easier to move to homes. Customer credit balances.
Utility Point said, “That’s why we have to announce that Utility Point will cease operations. Customers don’t have to worry, their materials are safe, and their domestic credit balances are protected.
“Ofgem’s recommendation is not to change, but wait for a new supplier to be appointed and also to take a proper meter reading when your new supplier contacts you. This will help ensure that the process of moving consumers to a new carrier and paying off domestic consumers’ credit balances is going as smoothly as possible for consumers.
Two of the UK’s smallest energy suppliers, PfP Energy and MoneyPlus Energy, have gone bankrupt. The interests of the approximately 90,000 to 100,000 affected families will be affected through the safety net controlled through the market regulator, Ofgem.
These collapses are believed to be due to rising wholesale fuel and electric power costs. There are fears that other suppliers will simply close their doors for the winter if fuel shortages in the face of development force costs to rise further.
Green Network Energy, Simplicity Energy and Tonik Energy are among the suppliers that have gone bankrupt in the past 12 months.
When a company finds itself in financial difficulty, its situation is heavily monitored through Ofgem. If shutdown becomes unavoidable, the regulator finds a supplier of choice to take care of the troubled company’s customers, thus maintaining uninterrupted supply.
Customers should take any action as Ofgem works with the relevant companies to honour credit balances and manage debt payments.
However, consumers who are transferred to a new provider will end up with a “considerate” contract that is likely to be costly. It is at this point that they deserve to conduct a comparison of the value of energy to see if they can be transferred to a less expensive supplier. choice, something they can’t do.
You can read more about what happens when an energy supplier goes bankrupt in Rachel’s article.
Evidence of the impact of emerging wholesale stocks emerged in August when Ofgem announced a sharp increase in its price cap to allow businesses to rate their consumers more to the popular “default” variable rate (SVT) due to emerging prices.
The £139 build-up will raise the cap to £1277 for a family with a typical intake when it comes into force on October 1, the highest point recorded since its introduction in 2019. All primary suppliers have announced value increases to bring in line with £139. building a higher roof (see below).
The limit is replaced twice a year, in April and October. Ofgem is expected to increase it further in April 2022 if wholesale price inflation slows.
You can read more about Ofgem’s value limit here.
About 11 million families benefit from number one settlements. The main opportunities are non-standard variable rate offers and fixed-term fixed-rate offers, in which the value per unit of energy used is fixed for a period of time, 12 or 24 months.
The value of these offerings is also increasing, with some companies offering fixed-value contracts at a higher price than their core offerings. An effective way to find out if you can save money by converting rates and/or services is to purchase a Quote on our site.
The change takes 21 days and there is no interruption of the source. Work will be required on your assets if you replace meters as a component of the process.
Following the announcement of a 12% increase in the value of its default Variable Standard Tariff (SVT) from 1 October, British Gas proposed to freeze direct debit bills for SVT users until February 2022.
October’s is in line with Ofgem’s latest price cap increase (see below) to £1,277 for households with average levels of energy consumption.
British Gas says it will assess the market in February 2022 before making a final decision on whether to replace direct debit invoices to reflect value accumulations. He says any buildup will ease in the coming months.
SVT consumers who prefer to start paying the premium value without delay (to increase their spending next year) can replace their direct debit via the British Gas app or by contacting the company.
Ofgem will also announce the next value limit in February, which will come into effect in April. This will undoubtedly influence British Gas’ calculations.
The company claims that its offer to freeze bills could be worth just £50 for consumers who accept it: “Freezing direct debit bills until after winter will leave an extra £50 in consumers’ pockets. We want to give our direct debit customers the ability to create a little extra monetary relief if they so choose.
August 26, 2021
Bulb is the latest major energy provider to announce a price increase for its Standard Variable Rate (SVT) default tariff holders.
The move follows the Aug. 6 announcement by market regulator Ofgem that its energy value limit on the default value lists would exceed 12% on Oct. 1.
Typical Bulb consumers will pay an extra £2. 90 per week that the new upper limit comes into effect.
Earlier this week, OVO Energy announced a 12. 25% increase in the value of its Simpler Energy default rate, effective October 1, 2021. Customers of OVO-owned SSE Energy Services will see an increase.
Large rival corporations Eon and Scottish Power will also increase their costs proportionately in October. Ebico, Igloo, So Energy, Zebra and Orbit also announced raises.
Ofgem’s new cap, which applies to consumers with default SVT fees, will be £1,277 for families with average admission points, an increase of £139 from the existing point. It is now at its peak since its introduction in January 2019.
The series of value increases announced in recent days brings companies’ SVT stock charts to a point near or close to the ceiling. Further increases are believed to be in the works.
Below are the details of Ofgem’s price cap, adding the figure for families benefiting from prepayment fees.
EDF was the first company to react to the price cap announcement last week, revealing its own 12% increase, effective October 1.
British Gas, the UK’s largest supplier, is expected to announce a rise in value for SVT holders in the coming days.
Ofgem has raised the point of the cap to allow companies to qualify further as they face significant increases in wholesale energy and natural gas prices.
Ofgem has suggested consumers with SVT’s default tariffs to compare prices to potentially save “hundreds of pounds” by switching to a less expensive tariff.
At a glance
Energy giant EDF is the first supplier to announce a price increase in line with the recent increase in the official energy price cap administered by regulator Ofgem (see article below).
EDF’s decision, which is expected to be followed by other primary suppliers, will increase the typical charge of its dual-fuel ‘default’ variable tariff to £1,277 (a 12% increase) from 1 October. This is the date on which the new Ofgem limit comes into effect.
EDF’s Philippe Commaret said: “We know that a price increase is never welcome, especially in difficult times. In 2020, prices for our popular variable consumers fell to an average of £100 per year, and values as soon as we can “As Ofgem explained, it is global fuel prices that have led to an unprecedented rise in wholesale energy costs and, as a long-term sustainable business, we want to reflect the costs we are facing.
“Customers whose rates are replaced in October will receive a letter reminding them to verify that they are receiving the appropriate rate. “
The regulator raised the cap to £1,277 (its level since its introduction in 2019) so that suppliers can rate their consumers with higher rates to account for the emerging wholesale cost of energy, i. e. natural gas.
Volumes have increased by as much as 50% in the last six months due to cold weather and growing demand brought on by the industry coming out of Covid-19 lockdowns.
An estimated 11 million families take advantage of providers’ default price lists, largely because they have never replaced their rate or because they have not replaced their rate for two years or more and have therefore opted for their provider’s default offer.
A further 4 million families benefit from expensive prepayment fees, and the Ofgem limit will also increase on 1 October, from £153 to £1,309.
Ofgem says this combined total of 15 million homes can save “hundreds of pounds” on their annual energy costs by buying food and opting for a less expensive deal.
Anyone who switches now will comfortably reap the benefits of their new tariff before October 1 – the procedure for finding a cheaper deal only takes a few minutes and the upgrade itself will be completed in 21 days.
There are no interruptions in supply and no need for work inside or outside your home.
At a glance. . .
Energy market regulator Ofgem is extending the cap on popular variable rate default price lists to £139 from 1 October 2021, it announced today. The 12% increase will raise the cap, which applies to 11 million UK households, to £1,277 – its point ever.
The cap on prepaid rates will increase from £153 on the same day to £1,309. Approximately 4 million families will feel the effects of this increase.
Both limits will be reviewed over the winter and the new grades will come into effect in April 2022.
Ofgem imposes a cap to limit the amount that energy companies can rate their consumers based on predetermined and prepaid tariffs, but has increased this point due to rising wholesale energy market prices, which has increased the wholesale price of gas by 50%.
The caps shown apply to families with an average annual consumption. When families take advantage of default rates, it’s because they’ve never replaced their provider or rate, or because they haven’t replaced for two years or more.
Many other people who live in rented housing and with modest incomes benefit from prepayment of meter fees.
Ofgem’s limit does not limit the amount of expenses but the amount the electric company can charge for each unit of fuel and electrical energy used, plus current costs. Costs vary depending on each household’s point of consumption.
Substantial savings can be achieved through those who transfer from a predetermined variable rate rate to a competitive constant rate or variable rate arrangement (£477 is the minimum savings of the richest 10% of savers who have transferred fuel and electric power through Comparison Technologies, Forbes. Advisor’s Energy Comparison Partner, in the era from January 1, 2020 to December 31, 2020).
There are also competitive prepaid rates for those who wish to switch.
Ofgem commented: “Customers can develop this by making purchases or asking their supplier to offer them a better deal. “
Those with default and prepaid price lists now have just under two months to transfer energy providers or switch to a less expensive rate with their current provider. The good news is that the upgrade takes 21 days, and there are no interruptions in supply or need. for any paint on your property, internal or external. It only takes a few minutes to create a quote with our comparison service.
Jonathan Brearley, director of energy market regulator Ofgem, says the energy price cap could soar to £150 from 1 October 2021. The actual increase will be announced on Friday, August 6, 2021.
The price cap applies to the “default” variable rate price lists and limits the amount energy providers can charge for fuel and electric power assemblies, as well as the current rates associated with the rate. Currently, it amounts to £1,138 per year for a typical family with average consumption.
An estimated 11 million families take advantage of default rates, either because they have never changed providers or because they have been transferred to a predetermined arrangement through their provider following the termination of a previous arrangement.
There is a limit to the 4 million families with prepaid meters: £1,156 a year.
Most providers set their rates to the maximum allowed by the limit. As the annual figure is a limit to unit rates and not to the number of bills, the amount to be paid will depend on the amount of energy used.
Brearley says the cap will be enforced because the global costs of fossil fuels, specifically gas, are rising at an unprecedented rate. Ofgem will allow suppliers to rate higher costs because they pay more in wholesale markets.
“Unfortunately, rising wholesale prices will affect the price cap and while the final investigation is not complete and other prices will also be the overall point, it could go up around £150 per unit to the next price point. cap. ” he said.
Ofgem announces in advance the update of the price cap to allow affected Americans to move to a cheaper offer. The regulator is actively promoting the upgrade, noting that there are many lists of cheaper securities available for those with predetermined agreements – fixed. -Lists of fixed-rate term securities that fix the unit value for 12 or 24 months.
Brearley added: “Although the value of these constant contracts is also increasing due to emerging wholesale energy prices, if you compare prices, you could still save a lot of euros on your energy bill. “
Switching now would mean maintaining current rates in anticipation of the expected increase in wholesale costs in the fall.
As we reported last week, the government is introducing an automatic transfer for those with default rates, unless they opt out of the process.
However, this would not be implemented until 2024, leaving default consumers vulnerable to peak energy prices for the next 3 years unless they decide to transfer suppliers.