Chancellor Jeremy Hunt has announced that the Energy Price Guarantee will be extended to last until April 2024. From April 2023, the annual energy bill of the typical household will increase to £3,000; an estimated £500 saving compared to the expected Ofgem price cap.
This article will outline the Energy Price Guarantee, a new measure announced by the Government on the 8th of September (and updated on the 17th of November) to provide further support for energy customers. This is in addition to the Energy Bill Support Scheme.
The Energy Price Guarantee (EPG) and Government Energy Price Guarantee (GEPG) are the same thing, you may have heard the name used interchangeably in the media or publications.
TABLE OF CONTENTS
- What energy support has the Government announced?
- When will the Energy Price Guarantee be available?
- How will this change my Direct Debit?
- Where can I find more information?
What energy support has the Government announced?
The Government has outlined its Energy Price Guarantee (EPG) that caps energy prices for typical households until April 2024. This is the maximum cost of each unit of gas or electricity a household uses. From April, the annual energy bill of the typical household will increase from £2,500 to £3,000; an estimated £500 saving compared to the expected Ofgem price cap.
Remember, your actual annual costs will depend on how much energy you use so your yearly bill could be greater or smaller than £3,000.
The Government will continue the Energy Bills Support Scheme, giving electricity customers a £400 discount on their energy bills spread over 6 months, starting 1 October.
The EPG will reduce the unit rates for gas and electricity from the values announced under Ofgem's quarterly price cap plans. Standing charges will not be affected and will change in line with Ofgem's guidance.
When will the Energy Price Guarantee be available?
From 1 October, all customers on our standard variable tariff So Flex will benefit from the Energy Price Guarantee and all our electricity customers will also benefit from the Energy Bills Support Scheme. The Government has announced the new unit rates and you can check them here.
What will I need to do to receive the Energy Price Guarantee discount?
Don't worry, there's nothing for customers to do - we'll handle all of that for you and apply the discount automatically if you're on an eligible tariff - see below for which tariffs will benefit from the EPG.
Which tariffs will be affected by the Energy Price Guarantee?
All customers on our standard variable tariff, So Flex, and customers on some of our fixed rate tariffs will benefit from the Government’s Energy Price Guarantee.
Until April 2023, the Government’s goal is to set the energy bills of typical-use households at around £2,500 a year (rising to around £3,000 until April 2024) by offering subsidised energy rates. For over 70% of our fixed tariffs, the unit rate is already priced below the Energy Price Guarantee unit rate, so they will not receive an Energy Price Guarantee discount.
The remaining 30% of fixed rate tariffs are priced above the discounted unit rates so will be eligible for the discount. For customers on these tariffs, the discount will bring their rates down to the discounted unit rates. This will be reflected in your monthly statement.
A very small number of customers fixed their energy at a high price and so, despite being eligible for the discount, their discounted unit rates will still be higher than the Energy Price Guarantee’s target rates.
At the moment, our only available tariff is So Flex, our standard variable tariff. If your fixed rate tariff is coming to an end, you will automatically be moved onto So Flex.
How will this change my Direct Debit?
All customers will see a change in their Direct Debit to reflect the new rates set by the Government and the impact of the related Energy Bills Support Scheme. Here, you can check how the Energy Price Guarantee will affect your tariff rates, but as a guide, we expect:
low energy users to pay less than they do today
typical users to pay about the same as they do today
high users to pay more than they do today but still a lot less than what was previously projected
Where can I find more information?
Our blog is a really useful source of information for your energy-related questions, including details of the Energy Bills Support Scheme, a guide to energy assistance ahead of winter, reasons for energy prices changes, and much more.
Last updated: Thu, 17 Nov, 2022 at 5:15 PMPrint this page
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