Everything you need to know about the upcoming price changes for variable members
How the Price Cap affects you
The price cap is set by Ofgem, and it puts a limit on the rates energy suppliers are able to charge on Pay As You Go variable plans. The amount you pay per day, week, month or year will depend on how much energy you’re using. Ofgem announced that the energy price cap would increase on 1 April 2022. On the same date, we increased our prices on our Pay As You Go tariff in line with the cap.
We sent letters and emails to our members whose prices would be changing, so you’ll be able to see how the changes would affect your bills. This included your new energy prices and a personalised projection of your future bills based on your exact or estimated energy use.
We aimed for all members to have received their new prices by 12 March at the latest. The new prices came into effect on 1 April.
We sent out letters and emails to our members whose prices have changed. This included your new energy prices and a personalised projection of your future bills based on your exact or estimated usage.
All members should have got their new prices by 12 March at the latest. The new prices came into effect on 1 April.
It depends on the type of meter you have:
- If it's a smart meter, there's nothing you need to do - we'll have updated your prices automatically on 1 April
- if it's a traditional meter, your prices will update the moment you top up with your electricity key or your gas card, on or after 1 April
We’ll never charge you more than the price cap.
It’s also important to be aware that the figure of £2,017 (which is often used by Ofgem when talking about the price cap) is the average yearly cost of energy per household. If your home uses more energy than that, then the yearly cost will be higher.
The price cap is there to set the maximum rate you can be charged per kWh of energy, on a variable plan. This is known as the unit rate. The price cap also sets the standing charge – this is the amount you pay per day to stay connected to the grid (covering the costs for things like power lines and pipes).
Using more energy will also cause bills to go up – whichever type of tariff you’re on, whether it’s variable or fixed.
Using more energy is the other main factor that affects costs.
While we’d love for you to stay with us, we understand if you decide to switch. If your new energy supplier tells us you’re switching within 20 working days of 1 April, then you’ll stay on your old rates until you leave us.
You’ll need to pay off any debt you might have before you go, to make sure your switch goes smoothly. We’ll let you know if there’s anything left to pay – and you can always get in touch if you’re worried about this.
If everything’s paid off within 30 days, your switch can go ahead and the new price change won’t affect you.
We understand that lots of our customers are feeling worried about changes to the energy price cap. We regularly review our prices to make sure they’re fair. If we decide to change prices, we’ll give you plenty of notice.
We’re sorry that your information wasn’t right in your recent letter.
These letters were based on the information we had for you on Saturday 12 February. If any of your details changed after this date, they weren’t included.
When you update your details, we need a little time to update them in our system – so we might not have had your latest information when we sent the letter.
This is because gas is also used to generate a lot of electricity. In 2020, 35.7% of the electricity produced in the UK was created by burning natural gas.
Even if you only buy electricity from us, wholesale gas is still used to produce that electricity. Since the price of wholesale gas has gone up, this means that electricity is more expensive to produce. Unfortunately, this means the price of your electricity has also gone up.
What the price cap is and why it’s rising
The energy price cap is set by Ofgem, the energy regulator, to put a limit on what energy suppliers can charge on variable plans, including Pay As You Go. The cap takes into account costs energy suppliers are facing, while making sure prices are fair. It can go up or down – depending on the cost of wholesale energy.
As of 1 April 2022, the new price cap is £2,017.
It’s important to be aware that the figure of £2,017 (which is often used by Ofgem when talking about the price cap) is the average yearly cost of energy per household. If your home uses more energy than that, then the yearly cost will be higher.
The price cap sets the maximum rate you can be charged per kWh of energy, on a variable plan. This is known as the unit rate. The price cap also sets the standing charge – this is the amount you pay per day to stay connected to the grid (covering the costs for things like power lines and pipes).
Using more energy will also cause bills to go up and it’s the other main factor that affects costs.
If you’re worried about your energy costs, we’re here to support you.
Prices will stay this way from 1 April to 30 September 2022.
We’ll always give you plenty of notice, whenever your energy prices are going to change.
The main cause is the rising cost of wholesale energy (this is the price we pay to buy energy from the companies that generate it). It’s more than doubled over the last year, and that huge rise has been driven by a number of things, including:
- Countries returning to normal after lockdowns
- And a decreased gas supply coming from Russia into Europe
Ofgem sets the energy price cap by looking at the wholesale energy market. The aim is to keep prices fair for both customers and energy suppliers.
The calculations behind the cap are based on how much Ofgem thinks it will cost energy suppliers to buy the energy they need for their customers. Ofgem also factors in things like operating costs. This is the money energy suppliers spend on things like billing and installing meters, and network costs (the price of maintaining the pipes and wires that transport gas and electricity to your home).
To work out how much customers should be billed, Ofgem uses Typical Domestic Consumption Values (TDCVs). These are statistics that Ofgem produces every 2 years, showing what the average low, medium, or high energy use per household is.
This is an industry-wide issue and it’s clear that more drastic and longer term action is needed. We’ve been working with the government, Ofgem, and our charity partners, because reform needs to happen as quickly as possible. We promise you, we won’t stop until energy is fairer for all.
The cost of keeping the network running has gone up, which means the standing charge has risen too. The standing charge covers the extra costs of supplying your home with energy. These include connecting your home to the energy network and maintaining the wires and pipes that carry gas and electricity to your home.
It’s tough to say how prices will change in future – nobody knows for certain. The changes in the wholesale energy market have been driven by a number of things, including:
- An increase in global demand for energy as countries return to normal after lockdowns
- And a decreased gas supply coming from Russia into Europe
These factors are really complex, and unusual. We’ll be keeping our customers updated on how it affects them as the situation develops.
Like all energy suppliers, our customers will be part of October's £200 energy loan scheme. We're actively planning with the government on how best to roll it out to our customers.
Financial support: how we can help
If you can’t afford to top up or pay for energy, there is help available - both from us here at Boost and from government schemes and charities as well.
Here are the steps you should take if you can’t afford to top up. [https://www.boostpower.co.uk/help/how-to-save-money/boost-energy-fund]
These government-run schemes could also help you with your energy bills.
Fuel Direct Scheme
The Fuel Direct scheme helps to pay your energy bills directly from your benefits (the scheme is run by the Department for Work and Pensions). For more information, contact Jobcentre Plus or your pension centre if you’re on Pension Credit.
Cold Weather Payment
A Cold Weather Payment might be available to you, if you’re getting certain benefits. These payments are made if the temperature in your area is forecasted or recorded to be 0C or below for over 7 days in a row. Find out more and see if you’re eligible here.
Winter Fuel Payment
This is available to people who were born on or before 26 September 1955. It’s an annual one-off payment between £100 and £300, to help pay for your heating over the winter. Find out more about the Winter Fuel Payment here.
Warm Home Discount Scheme
You might be eligible for £140 credit towards your energy bills through the Warm Home Discount Scheme. Although applications have closed for this winter, they’ll reopen later in the year for next winter.
Find out more about the Warm Home Discount here.
Finally, you can also contact The Centre for Sustainable Energy. They give free, impartial advice on saving energy. Just visit cse.org.uk/ovoboost