The energy price guarantee: What you need to know

Wholesale energy prices are lower than the rates set by the energy price guarantee (EPG). So now households pay the energy unit prices set byOfgem's energy price cap.

The EPG is still in place until March 2024 to protect customers if energy prices reach over £3,000. It works in a similar way to the energy price cap and limits what energy providers can charge per unit of energy.

What are the energy unit prices under the Energy Price Guarantee?

Now, energy unit prices are regulated by Ofgem's energy price cap. You can find the capped unit rates in our energy price cap guide.

These are the average energy prices for the UK under the EPG:

Source: GOV.UK

*This is the average price for Great Britain

Standing charges

Standing charges will also stay capped at the levels set out by Ofgem. This is a fixed daily amount that covers the cost of supplying your property with energy. You have to pay a standing charge regardless of how much energy you use.

The average standing charges from 1 April are:

• 50.4p per day for electricity 
• 27.7p per day for gas 

This applies to both fixed and standard variable rate tariffs.

Your bill and the Energy Price Guarantee

Now, energy unit prices are regulated by Ofgem. But here's how your energy bill could look if the EPG ever returned:

• Standard variable rate tariffs
• Fixed tariffs
• Prepayment meter and variable contracts

I’m on a standard variable rate tariff, how does the Energy Price Guarantee affect my energy unit rates?

If you’re on a standard variable rate tariff, your average energy unit price should be:

• 33.2p/kWh for electricity (inc. VAT)
• 10.3p/kWh for gas (inc. VAT)

Your supplier should have automatically applied these rates to your energy bill.

I’m on a fixed tariff, how does the Energy Price Guarantee affect my energy unit rates?

This depends on when you got your fixed deal, and how long it lasts for.

Your energy prices might already be below the EPG if your fixed tariff was in place before the energy crisis. This is known as the ‘floor price’, and it’s the minimum amount a supplier can charge per unit of energy.

If you’re on a fixed rate tariff that’s below floor price you won’t get a further discount on your rates.

Floor prices vary by region, but the average for Great Britain is 34p/kWh for electricity and 10.3 p/kWh for gas.

If your fixed tariff is above floor price, your energy supplier should have automatically reduced your energy bill by:

• 16.6p/kWh for electricity 
• 2.2p/kWh for gas 

I’m on a prepayment meter and variable contract, how does the Energy Price Guarantee affect my energy unit rates?

You pay the following unit rates if you have a prepayment meter:

• 16.6p/kWh for electricity 
• 2.2p/kWh for gas

From 1 July, prepayment meter customers will pay the same amount for their energy as an equivalent direct debit customer until 31 March 2024.

Before this announcement, prepayment meter customers were paying more for their energy than direct debit customers. The reduction was announced in the spring budget and could save prepayment customers £45 per year.

What is the Energy Price Guarantee?

The Energy Price Guarantee (EPG) is a cap on the unit prices of energy. 

Now, energy unit prices are regulated by Ofgem’s energy price cap. But the EPG remains in place in case wholesale energy prices exceed £3,000. 

If wholesale energy prices exceeded price cap levels, the EPG would activate again. This means a typical UK household would pay up to an average of £3,000 per year for their energy bills under the EPG.

This isn’t a cap on the cost of your energy bill. Like the energy price cap, the EPG limits the amount you’re charged for each unit of gas and electricity. The price of your bill still depends on your energy usage.

The EPG was introduced because the price cap was rapidly increasing due to the rising cost of wholesale energy.