By Mathew Carr

Nov. 24, 2022 — Misleading charts, failing to tell the whole story in undated statements, chopped charts …I’m shocked the UK energy market is not learning more quickly from past mistakes and continues to mislead customers and effectively slow the climate transition as it does so.

Ofgem boosts the price cap again and hides the news low in its Web page.

Is that your role, Ofgem, hiding the truth? Who gave you that mandate? The government?

Number 7

Here is the announcement, with apparent missing far right of the futures charts?! WTF? For the real, unchopped futures chart see below the Ofgem release.

CarrZee comments, emphasis in square brackets below and with some bolded text. Please suggest more at mathew@carrzee.net

Latest energy price cap announced by Ofgem

Press release linked here [but even the link seems suspicious because it has no date and may be taken down later to change history ?]

Publication date

24 November 2022

Industry sector

Supply and Retail Market

Related links

Energy regulator Ofgem has today (Thursday 24 November 2022) announced its quarterly update to the energy price cap for the period 1 January – 31 March 2023.

The price cap is set to rise to an annual level of £4,279 in January 2023, but bill-payers remain protected under the government’s Energy Price Guarantee (EPG).

The energy price cap level indicates how much consumers on their energy supplier’s basic tariff would pay if the EPG were not in place.

The price cap has been in place since January 2019, and it is a legislative requirement for Ofgem to regularly review the level at which it is set. It ensures an energy supplier can recoup its efficient costs, whilst making sure customers do not pay a higher amount for their energy than they should. The price cap, as set out in law, does this by setting a maximum suppliers can charge per unit of energy.

For the first three months of 2023, the energy price cap will increase [what percent Ofgem — hiding this too?] to an annual level of £4,279 for an average dual fuel household paying by direct debit based on typical consumption, [emphasis added] but bill-payers will still be protected by the Government’s Energy Price Guarantee until the end of March 2024, as confirmed by the Chancellor on Thursday 17 November.

There is no immediate action for consumers to take as a result of today’s announcement.

Ofgem continues to protect consumers through its ongoing robust regulation of the market, taking enforcement action where necessary and providing support to those who need it the most. Earlier this week, Ofgem set out the proactive action it was taking against 17 energy suppliers to ensure that consumers are protected this winter and beyond.

The next quarterly price cap update will be on 27 February 2023.

NOTES TO EDITORS:

The Energy Price Guarantee protects consumers reducing the unit cost of electricity and gas so that that a typical dual fuel direct debit bill for January 2023 remains at £2,500 and will be increased from April 2023 to a new level of £3000, with cost-of-living payments of £900 for those on means tested benefits, £300 to pensioners, £150 to those on disability benefits and doubling support for those on LPG or heating oil.

The level is based on typical use for an average household and is a cap on energy unit price not a cap on total bills. For an individual customer, the amount they will pay under the Energy Price Guarantee varies depending on how much energy they use, where they live, and how they pay for their energy.

The tariff cap was legislated by government in order to protect default tariff customers (i.e. those on standard tariffs) from being overcharged [But please don’t misunderstand, you will pay in the end, or your kids will]. Ofgem administers the scheme and publishes cap rates on a quarterly basis.

The methodology for setting the price cap is regularly reviewed by Ofgem. [Regularly enough?]

Section 5 sets out future price cap dates: Check if the energy price cap affects you | Ofgem
Published cap levels for the charge restriction period 9b of the default tariff cap: 1 January 2023 – 31 March 2023.

The price cap protects around 26 million customers on default or variable rates on credit meters. The £4,279 per year level of the cap is based on a household with typical consumption on a dual fuel electricity and gas bill paying by direct debit.

Following the 4 August announcement, the price cap will be updated on a quarterly basis. More information on this can be found on the “Ofgem confirms changes to the price cap methodology and frequency ahead of new rate to be announced later this month” press release. Customers who pay by standard credit (cash or cheque) pay an additional £254 based on the higher cost for energy companies to serve them.

The 26 million customers protected by the price cap includes around 4 million prepayment meter customers. These customers pay an additional £80 compared to those on direct debit, which also reflects the higher cost for energy companies to serve them. The values shown in the text above include VAT and are expressed for the current Typical Domestic Consumption Values (TDCV) of 2,900kWh of electricity, 12,000kWh of gas, and 4,200kWh of electricity for Economy 7. For electricity only customers on Economy 7 meters the direct debit cap level has increased to £2,988 which is an additional £759 compared to the previous cap update.

The price cap is a cap on a unit of gas and electricity, with standing charges taken into account. It is not a cap on customers’ overall energy bills, which will still rise or fall in line with their energy consumption. From 1 January the equivalent per unit level of the price cap to the nearest pence for a typical customer paying by direct debit will be 67p per kWh for electricity customers and a standing charge of 46p per day. The equivalent per unit level for a typical gas customer is 17p per kWh with a standing charge of 28p per day.

Breakdown of costs in the energy price cap
Dual fuel customer paying by direct debit, typical energy use (GB £)

The charts below shows indexed wholesale prices from cap period 9a (Oct – Dec 22) to cap period 9b (Jan – Mar 2023). Wholesale costs make up the majority of a customer’s bill.
Prior to October 2022 update – we observed wholesale prices for future delivery over an indexation period. This was carried out twice a year, from the preceding February to August for the winter period (October – March) and from September to January for the summer period (April – September).

The fixed horizontal lines show the average wholesale cost allowance for each 6 month price cap period based on the price of the relevant forward looking energy contracts (the jagged line).

[Why is the far right fixed horizontal line so short? See this below. The transitional approach, which locks in the highest of high prices, apparently, for the first quarter of 2023, gouging taxpayers, if not consumers immediately]

From October 2022 – As set out in our 4 August decision document, the October 2022 wholesale allowance calculated within the price cap uses a transitional approach to price indexation compared to previous periods as such they are not directly comparable.

From April 2022 [2023?] we will determine the wholesale cost allowance within the price cap four times a year, based on the price of the forward-looking energy contracts over the previous three months.

The fixed horizontal line representing the November update, January – March 2023, shows a weighted average wholesale cost allowance for the 3 month price cap period based on the price of the relevant forward looking energy contracts and number of observed trading days (the jagged line).

Wholesale gas price costs in the energy price cap

Wholesale electricity price costs in the energy price cap

line graph of wholesale electricity prices

Data sets behind these graphs are proprietary and can be sourced from ICIS.

Current government support available for consumers:

Energy Bills Support Scheme: millions of households across Great Britain will receive a £400 non-repayable discount on their energy bills from October this winter.
Warm Homes Discount: a £150 Warm Homes Discount will also begin to be paid to 3million low-income households from October.
Households most in need will be eligible for further support in addition to the Energy Bills discount. This includes:

– £650 one-off Cost of Living Payment for around 8 million households on means tested benefits;
– A one-off £300 Pensioner Cost of Living Payment for over 8 million pensioner households to be paid alongside the Winter Fuel Payment;
– A payment of £150 for around six million people across the UK who receive certain disability benefits;
– A £500 million increase and extension of the Household Support Fund.

Information and materials for consumers about the price caps is available at: www.ofgem.gov.uk/energy-price-caps. Information on support and advice for consumers worried about paying their bills is available at: http://www.ofgem.gov.uk/help-with-bills

For all other non-media related enquiries, please visit our Contact us page.

The Real Dutch Natgas Futures chart (proxy for global gas price) from ICE:

Taxpayers will pay even if customers don’t immediately. Who are the taxpayers? THE CUSTOMERS!!!!!

Is Ofgem hiding the real (plunging) cost of fossil fuels from customers?

Centrica’s British Gas Published this below at some point earlier this year … Undated (confusing, non transparent) and high in Google Searches [“British Gas decreases prices” was my hopeful search]

UNDATED – Why undated, Centrica / British Gas? Why is this favored in your search results, Google?

Recent changes to Wholesale Energy

About the price cap
More detail on the new price cap

The Government’s Energy Price Guarantee will now mean the average household energy bills will be no more than £2500 per year, until April 2023.Energy price cap

Why do wholesale energy costs affect my bills?

The price increase doesn’t mean bigger profits for energy suppliers. This makes up less than 1% of your energy bill. Around 80% goes to the cost of wholesale energy and on network costs to deliver the energy to your home.

The rise in wholesale energy costs has been so steep that some energy suppliers have dissolved in the last few years. That’s why all energy suppliers have had to increase prices in line with the Ofgem’s price cap level. To help households with this increase, the Government has announced an Energy Price Guarantee (EPG) that means the electricity and gas rates will be discounted. So a typical household energy bill will be around £2500 per year from October 1st – however your bill could be higher or lower depending on how much energy you use at home. The EPG is in addition to the £400 Energy Bills Support Scheme (EBSS) every household will automatically receive. How you’ll get the £400.

The chart below shows the increase in the average default tariff price caps and the level of the Government’s Energy Price Guarantee.

So why has the price of energy gone up so steeply?

1. The UK’s gas storage levels are “historically low”

This is according to the Chief Executive of Ofgem, Jonathon Brearley. Our European neighbours have similar problems, but our supply here in the UK is the lowest in Europe by far.

2. Russia has invaded Ukraine

This sad turn of events has caused lots of countries and companies to condemn Russia’s actions and create sanctions, planning to reduce their reliance on Russian gas. But avoiding Russian gas reduces supply levels globally, while the demand stays the same. This pushes the price up. [NATO stoked the war]

3. We had a cold winter 2020/2021

The winter of 20/21 was particularly cold and long. It was the coldest April since 1922, which meant we used more gas than usual to warm our homes and businesses. [This winter is super mild so far]

4. Most UK energy sources struggled

2021 was a difficult year for most of the UK’s sources of power. There were unplanned outages at nuclear reactors, a big fire at the IFA power cable in Kent – where energy comes in to the UK from France. And we produced less wind and solar power than usual because of the weather that year.

5. Asian and South American countries are buying more gas

In the UK we would have ordinarily have bought more gas to make up for the missing stocks, but huge global demand has made that difficult. As Asian and South American countries transition away from coal, they’ve been buying more gas, increasing demand even further.

6. Our European suppliers have problems of their own

When you can’t get the power you need from one place, you’d usually go to another. But all of the places the UK usually gets its power are struggling to meet demand.

[7. British Gas failed to hedge properly for the longer term., even though it could have, would have, should have

8. British Gas failed to invest more heavily in renewable power when it had the chance.]

Ofgem said in 2021 that “there have been periodic issues with Norwegian and Russian pipelines, which has reduced gas imports from these major suppliers.” When you think that we got 55% of our imported natural gas from Norway in 2020, you can see how this has made things even worse.

All added together, it’s clear why the wholesale price of gas has gone up by 335% in the last 12 months.

[This is a big fat lie since it is undated] see chart above

Centrica’s British Gas statement on Nov. 22

Last updated: Tuesday 22nd November 2022

Energy news and the Energy Price Guarantee (EPG)

The latest news on energy prices and government support.

info

Ofgem warn against scams [CarrZee asks is Ofgem and Centrica part of the biggest scam hiding in plain sight?]

There’s been an increase in the number of phishing scams offering customers discounts/refunds on their energy bills and rebates on their Council Tax. Please don’t respond to any messages asking for your bank details. Read more to know what to look out for.

Latest update: 22nd November

The energy regulator, Ofgem, is due to announce new energy prices this week. We want to reassure you that this wont affect your energy bills as the current Energy Price Guarantee will be in place until 31st March 2023. From April 2023 to April 2024 the average bill will be around £3000 per year depending on your energy usage. They’ve also announced that they’ll continue to help households with their energy bills from April 2023.

There’s nothing for you to do, we will update you as soon as we know more. Find out how making changes to your energy usage at home can reduce your bills.Energy saving tips

Why have energy prices risen so high?

Lots of factors have led to this – from low gas storage to cuts in supply. As a result, it costs energy companies a lot more than it did a year ago to buy the energy that we supply to you. That’s why it became necessary for the Government to step in and help control the rising cost of energy. More on why wholesale energy prices have increased.

We wanted to give you some more information on the current EPG unit rates:

From the 1st October until 31st March 2023, your unit cost of electricity and gas now has the EPG discount applied
For an average household this will mean a saving of around £700 this winter
Unit prices can differ slightly depending on where you live and how you pay for your energy
Your bills will be higher or lower depending on the size of your home, how many people live there and how much energy you use. So, if you use more energy, your bill will be higher
The EPG discount is in addition to the £400 discount you’ll receive on your energy bill as part of the Energy Bills Support Scheme (EBSS).

The rates in the table below show the difference in energy rates and estimated bills between the level of the October price cap and the Energy Price Guarantee.

	October 2022 price cap rates (current level)	Average Energy Price Guarantee (EPG) rates*
Gas standing charge	28.485p	28.485p
Gas unit rate	14.758p	10.330p
Electricity standing charge	46.356p	46.356p
Electricity unit rate	51.886p	34.037p

*Based on the government Energy Price Guarantee rates and a customer with typical energy usage, paying by Direct Debit. Unit rates and charges vary according to region and payment type.

When will I get the £66?

The Energy Bills Support Scheme (EBSS) is the government’s discount on every household’s electric bills this winter. It’s been set to help us all with rising bills. When and how you get it depends on how you pay for you electricity bills.Find out when you will get yours

We can help reduce your energy bills

And we’ll do all we can to make sure you feel supported. We know that everyone’s circumstances are different and that some may find this price increase especially difficult.

Reducing energy use can reduce your bills

We can all take steps to reduce energy consumption in our homes. Understanding how much each appliance uses can help you use them more consciously.Energy usage at home

I need financial help

We don’t want anyone to stop heating their homes or using power because they can’t afford it. If you find yourself in difficult circumstances, please tell us.Struggling to pay

I’m struggling with debt

We know we need to do more to help right now. That’s why we’ve put together a £50 million customer support package to help those facing financial hardship this winter.We can help

CarrZee’s final word

Think you are struggling with debt now?

What until your kids get the bill for the war that NATO stoked.

So weapons, climate chaos, higher mortgage payments to profiteering banks, dodgy energy price guarantees that GUARANTEE taxpayers will pay pay pay in the future as government debt balloons and energy company profits surge.

The happy families pictured above won’t be so happy in the future.

CarrZee Carbon

Ofgem, British Gas, Google Lag on Plunging Wholesale Prices is Unacceptable; Website Dishonesty