The BBC has learned that the largest energy providers in Britain have been communicating with consumers about a small price hike that will take effect in the new year.
Major energy suppliers have informed the BBC that they will change their unit prices as of January 1.
However, the changes will likely only add pennies to bills rather than pounds.
The government maintains that although the maximum rates suppliers can charge per unit have been alter, the average family annual wage would remain at £2,500.
Many customers have expressed concern after learning of a price rise, as prices have already climbed significantly, and many people already find it challenging to understand bills.
Beginning in January, the modifications will apply to Britain’s 12 energy “regions,” allowing suppliers to raise their gas and electricity prices to the new ceilings.
How are energy costs determin?
Due to the government’s Energy Price Guarantee, the typical customer on a normal variable tariff pays 34p for electricity and 10.3p for gas per kilowatt hour (kWh). A household using ordinary energy will pay £2,500 per year at those prices.
The rates, however, are merely averages. There are various charges depending on which of Britain’s 12 areas you reside in and whether you pay your bills by direct debit, a regular bill, or a prepayment meter.
Companies are now permit to make minor pricing adjustments for nearly every customer after the government amended the Energy Price Guarantee rates on January 1.
What is the rate of change for bills?
Customers are advised not to freak out if they receive an email stating new pricing because most changes only amount to a few cents. While most people will only make minor adjustments, there are differences across Britain.
Customers who pay their energy bills monthly or quarterly will see the biggest improvements. Both gas and electricity prices are rising in all 14 regions, with the highest changes occurring in North Wales, Merseyside, and London, where power prices are rising by more than 1p per kWh.
With a rate of 38.26p per kWh, which is more than 4p higher than the frequently cited average rate of 34p by the government, Merseyside will have the highest bills in all of Britain.
Merseyside and North Wales direct debit consumers will see their permitted power unit rate increase by 0.4p. In contrast, people in the northern region of the North East of England will see their permitted electricity unit price decrease by 0.4p.
Electricity rates have also decreased for consumers who pay in advance in eight locations. However, Liverpool and North Wales once more saw the largest increase, with a 0.4p increase.
Which vendors are changing their offerings?
The BBC has received confirmation from Scottish Power, Bulb, EDF, British Gas, and Shell that they will fully pass on the adjustments permitted by the government to customers.
Octopus stated that it would pass on cuts to customers but not increases. Except for “Economy 7” consumers, the corporation stated it would absorb the hikes. Clients billed and paid by direct debit will see changes from EOn, but prepayment customers won’t see any rate increases.
Prices shouldn’t be set until March.
Although the government guarantee exceeds the price cap established by the industry watchdog Ofgem, it still goes up in January. As a result, the government is responsible for compensating suppliers for the price increase.
According to a government official, some consumers are receiving alerts from their energy suppliers about price changes up or down due to Ofgem’s price cap altering on January 1. However, these changes will generally be minor.
The Energy Price Guarantee applies a fixed discount to tariffs. He continued to set Ofgem’s price cap at various amounts for various regions based on the costs to supply energy, explaining why these minor variations persist.