Energy companies can increase ANYONE’s bills by £28 to cover other customers’ debts
ENERGY companies will be allowed to increase everyone’s bills by £28 to help cover other customers’ debts, Ofgem says.
The regulator imposed the temporary levy to cover losses after Britons struggled to keep up with payments and incurred large arrears during the cost of living crisis.
After announcing that bills for many would fall dramatically by £238 a year when the new price cap comes into effect on April 1, Ofgem has since confirmed the coming costs.
It is believed that payment arrears have reached more than £3 billion as the country now works its way through a recession.
While most households will see their bills fall by £20 if the new limit falls, energy companies are still owed significant sums that need to be resolved, the regulator says.
Ofav They said they will now charge each customer an extra £28 a year to ensure debts are paid – as an estimated five million people are in arrears on their accounts.
An Ofgem spokesperson said: “We are also allowing a one-off additional payment of £28 per year (£2.33 per month) to ensure suppliers have sufficient funds to support customers who are struggling.
“This is added to the bills of people who pay their energy via direct debit or revolving credits.
“The temporary payment is partly offset by the end of a grant worth £11 per year to cover debt costs related to the COVID pandemic.”
NEW PRICE CAP
On April 1, the cap will drop from the current rate of £1,928 to £1,690.
The energy regulator said it will reduce the price a supplier can charge for gas from 7.42 cents per kWh today to 6.04 cents.
The price of electricity will fall from 28.62 cents per kWh to 24.50 cents, Ofgem said.
The fixed charge, a fixed amount that you have to pay per day for energy, regardless of how much energy you use, will increase.
For gas, fixed costs will increase to 31.43 cents per day, from 29.6 cents currently – based on the average in England, Scotland and Wales.
The daily fixed charge for electricity will increase from 53.35p to 60.1p per day.
This means that for customers with direct debit, your total fixed costs on the energy bill will increase from € 303 now to € 334 per year.
How do I calculate my invoice?
BELOW we show you how you can calculate your own energy bill.
To calculate how much you will pay on your current bill, you need to know both your unit rate for gas and electricity and the standing charge for each fuel type.
The unit rate is usually stated in p/kWh on your invoice.
The fixed charge is a daily rate that is paid 365 days a year, regardless of whether you use gas or electricity.
You must then record your own annual energy consumption from a previous bill.
Once you have this information, you can calculate your gas and electricity costs separately.
Multiply your consumption in kWh by the unit price in p/kWh for the corresponding fuel type. This is how you get your consumption costs.
You must then multiply each standing charge by 365 and add this figure to your usage totals. This is how you get your annual costs.
Divide this figure by 12 and you can calculate how much you will have to pay each month from April 1.
However, it is important to note that the price cap is not a limit on the total amount people will pay for their energy.
Instead, it limits the amount they pay per kilowatt hour, or unit, for gas and electricity.
The figure is calculated based on what Ofgem thinks an average household will use.
This is calculated on the assumption that an average household uses 2,900 kWh of electricity and 12,000 kWh of gas over a twelve-month period.
Those who use less will pay less, and those who use more will pay more.
Please note that the exact unit rates and fixed charges you pay may vary slightly depending on your supplier, where you live and how you pay for your gas and electricity costs.