Wholesale energy prices are lower than the rates set by the Energy Price Guarantee (EPG). So now households pay the energy unit prices set by Ofgem's energy price cap. The EPG is no longer in effect and is unlikely to come back into force. The information here should be used for reference only.
What was the Energy Price Guarantee?
When energy prices spiked at the height of the energy crisis, the government introduced the Energy Price Guarantee which was effectively a second cap. This cap was subsidised by the government to prevent customers having to pay as much as £4,000 per year for their energy. Once wholesale prices dropped below a certain level, the price cap came back into force.
What are the energy unit prices under the Energy Price Guarantee?
Energy unit prices are regulated by Ofgem's energy price cap. You can find the capped unit rates in our energy price cap guide.
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.
This applies to standard variable rate tariffs. If you opt for a fixed-rate tariff, your prices are set with the supplier directly.
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
I’m on a standard variable rate tariff - how did the Energy Price Guarantee affect my energy unit rates?
If you’re on a standard variable rate tariff, your average energy unit price would’ve been capped by the price cap at the subsidised level.
I’m on a fixed tariff - how did the Energy Price Guarantee affect my energy unit rates?
If your agreed rate when you fixed your contract was higher than the EPG, your supplier would’ve applied a government subsidised discount. This made sure you weren’t unfairly penalised for being locked into a higher contract.
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