Starting from 2019 the energy regulator Ofgem introduced an energy price cap to limit the maximum price chargeable for each unit of gas/electricity consumed on default tariffs - if you're on a fixed rate tariff the price cap comes into play when the deal ends.
The cap also applies to the maximum daily standing charge, a price you have to pay just for being connected to the utility.
The price cap is determined by working out the usage of an average user (12,000 kWh gas, 2,900 kWh electricity per annum) and then deducing the unit prices from that. So, if you use more units than an average user, your bills can still exceed the cap.
The standing charge per day can be set at any level by the supplier as long as the average user doesn't end up paying over the price cap limit annually.
The price cap has to factor the costs suppliers are facing, and due to rising wholesale prices (3x since the start of 2022 through demand supply factors), and other operational costs.
The government has introduced the 'Energy Bills Support Scheme', which will credit every energy account customer's account in the UK directly with £400 in October 2022 - worth £67 a month for the six months applicable.
Current (April 2022 - October 2022) unit rates are: 28p per electricity kWh and 45p daily standing charge, and 7p per gas kWh and 27p daily standing charge.
Based on the April 2022 price cap of £1,971 the charges above have to incorporate 12,000 kWh of gas and 2,900 kWh of electricty per year and the daily standing charges for both electricity and gas.
These are the past, current and future price caps and the difference any government support makes:
| Date | Annual Price Cap | Monthly Average User's Cost |
|---|---|---|
| January 2019 | £1,137 | £94.75 |
| August 2019 | £1,179 | £98.25 |
| February 2020 | £1,042 | £86.83 |
| February 2021 | £1,138 | £94.83 |
| August 2021 | £1,277 | £107.33 |
| April 2022 | £1,971 | £164.25 |
| October 2022 | £3,582 (£3,182 after credit) | £298.50 (£228.50 after credit) |
| January 2023 | £4,266 (£3,866 after credit) | £355.50 (£288.50 after credit) |
| April 2023 | £4,426 (£4,026 after credit) | £368.83 (£301.83 after credit) |
| July 2023 | £3,569 (£3,169 after credit) | £297.42 (£230.42 after credit) |
The change to quarterly price cap reviews comes as reports come in of possible blackouts across the UK this coming winter.