If I’m not paying £3,549 what am I going to pay?
Alongside the headline figure, Ofgem also publishes actual energy rates for each area of the country. These are divided into a standing charge (price per day) to pay for the costs of being connected to the gas or electricity grid and a price per unit of energy used. For Silchester in the Southern electricity region our rates are:
||14.88p / kWh
||52.07p / kWh
||28.49p / day
||44.41p / day
So if you can find how many units of gas and electricity you used last year from your previous bills you can calculate your expected costs for this year. For a standard variable rate, gas and electricity customer paying by direct debit this would be around £266 + 0.15 x [your annual gas usage in kWh] + 0.52 x [your annual electricity usage in kWh].
Does the price cap mean my energy bill is going to go up?
Not necessarily – many people are not on the standard variable rate, having chosen instead to fix their tariff for a period of months or years at an agreed rate. These rates are fixed for the duration of the contract and unaffected by the price cap. Some energy companies are still offering fixed tariffs but they all tend to be significantly higher than the standard variable rate. Still if you expect rates to go up further (as most commentators do) this might be a sensible option to protect yourself from future rises.
I pay the same amount each month – how is this going to change?
Most energy companies now bill a fixed amount every month based on a projection of what you are likely to pay over the course of a year. This means in the summer you pay more than the energy you actually use and in winter you pay less. Over the course of 12 months it should even out.
Energy companies have been criticised for significantly over estimating these monthly payments leading to people building up a substantial surplus – or (to put it another way) lending money free of charge to the energy companies. A change to the price cap provides an opportunity for energy companies to increase the amount they collect and you should be careful this increase is reasonable. Divide the amount you expect to pay over the next year (see above) by 12, and if this is not close to what your energy company is proposing as a monthly rate you can challenge them and ask for it to be reduced. If you have any difficulty with this, then Citizens Advice Tadley can help.