Price cap explained
On 27th February 2023, Ofgem announced its next quarterly update to the energy price cap for period 1st April – 30th June 2023. From 1st April, the energy price cap will be set at an annual level of £3,280 (for a dual fuel typical household* paying by Direct Debit), a reduction of almost £1,000 from the current level of £4,279, reflecting recent falls in wholesale energy prices.
Right now customers do not actually pay this figure as the government’s Energy Price Guarantee (EPG) continues to subsidise household bills. The EPG is currently set to remain at £2,500 a year for a typical household* until 30th June 2023. For more information about the EPG visit - https://www.scottishpower.co.uk/the-energy-price-guarantee
What is the energy price cap?
The energy price cap sets a limit on the amount that energy suppliers can charge you for each unit of gas and electricity, and also sets a maximum daily standing charge.
While your energy bill can still go up or down depending on how much gas and electricity you use, the price per unit and standing charge will never go above the cap. It also applies regardless of how you pay.
Ofgem, the energy regulator, is responsible for setting the price cap every three months with any changes taking effect on the 1st January, 1st April, 1st July and 1st October each year.
Once set, suppliers cannot charge more than the cap per unit of gas and electricity.
Ofgem base their calculations on the costs that energy suppliers face such as wholesale energy costs, the costs of building and maintaining the energy network, operating costs and environmental policy costs.
Will the energy price cap affect you?
If you are on one of our standard variable or default tariffs or are a Pay As You Go customer with a prepayment meter, then the energy price cap will automatically be applied. If your prices need to increase as a result, there’s no need to contact us. We’ll write to you by letter or email to let you know what your new prices will be before the change takes place.
If you are on one of our fixed price or flexi tariffs, the price cap does not apply for the duration of the tariff. Check a recent bill or your online energy account if you’re not sure what tariff you’re on.
The price cap only applies to domestic customers.
Is additional support available?
If you need more support, we’re here to help. Please read more about the help and support available to you here.
Our phone lines are very busy so if you have a question, please get in touch via webchat – it’s one of the fastest ways to contact us.
*A typical household is defined as one that uses 12,000 kilowatt hours of gas a year, and 2,900 kilowatt hours of electricity a year, and pays by Direct Debit.
Last updated: 16 March 2023