What is the Energy Plan?

from Worcestershire Now - OCTOBER 2022

What’s On

In September the Prime Minister announced changes to planned hike in energy charges that were due to take effect in October 22.

Under the new measures: • A typical household’s energy bill will rise to £2,500 a year from 1 October (from £1,971) • The “energy price guarantee” will last for two years • This is not a limit on how much you will pay - your bill depends on how much energy you actually use. Remember the above figure is just an average home, not your home. • Before the announcement, typical household bills had been due to rise to £3,549 a year • The plan applies to all households in England, Scotland and Wales. In Northern Ireland, the “same level of support” will be available • The one-off £400 fuel bill discount payments for households will go ahead • Anyone who doesn’t use mains gas and electricity - such as those using heating oil - will receive equivalent help • Businesses will be protected for six months initially, although nothing has been announced at the time of writing.

What is the energy cap? • The energy price guarantee will replace the existing energy cap, which sets the highest amount suppliers are allowed to charge households for every unit of energy they use. • These energy units are the kilowatt hours (kWh) on your bills. • Under the new price guarantee, a typical household can now expect to pay about £2,500 a year. This is based on a household which uses 12,000 kWh of gas a year, and 2,900 kWh of electricity a year. • But most households aren’t actually typical. Many factors - like the number of people in a house, the type of property and how much they use their heating - all make a difference. • So, big energy users will pay more than £2,500, and people who use less energy will pay less. What additional help will I get? • All households will be given a one-off £400 discount on their fuel bills from October, as previously announced. • In addition, £650 will be paid to more than eight million low-income households who receive many benefits or tax credits. • Further payments of £300 to pensioner households and £150 to disabled people will also go ahead. • The government hasn’t said whether these will be repeated next October.

How your bill might work out Using 8,000 Kwh of gas and 1,800 of electricity = £1700 per annum. The standing charge is also added to your bill – this is the daily charge just to be connected to gas and electric. Right now, the current rates for duel fuel tariffs are 27p per day for gas and 45p per day for electricity. That’s due to rise to 28.49p per day and 46.36p respectively according to the OFGEN website. n

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