Energy UK has been calling on Government to keep bills down for customers by holding the Energy Price Guarantee (EPG) at its current level in April, and today publishes analysis showing how much this would save households in different regions across Great Britain.
The EPG has been in place since last autumn and has capped energy bills at £2,500 for an average household, shielding customers from bills which would otherwise be nearly £1,800 per year higher at present (although this amount will decrease significantly when the new price cap comes into effect next month).
The Government has previously stated that it will increase the EPG level to £3,000 from April onwards and the figures published today show that this would lead to customers paying an extra £2.7 billion in total from April-June – which in some regions equates to as much as £400 million. (See dataset below)
Additionally, the separate monthly rebate payments (of £66/£67) made to customers over the winter also end in March, meaning unless the Government does indeed maintain the EPG at £2500, customers will be facing very significant cost increases next month, of around 75%.
With falling wholesale prices slashing the anticipated cost of the EPG by billions of pounds, Energy UK alongside many charities and consumer groups has been urging the Government to use that surplus to freeze the EPG at £2,500. – and to confirm this as soon as possible.
Delaying the announcement would risk the correct rates not being implemented in time, especially for customers on prepayment meters, and leaves little time for suppliers to communicate any changes to their customers.
Analysis from Cornwall Insight has estimated that the cost of freezing the EPG would now be less than 10% of the total cost of the scheme.
Energy UK’s chief executive Emma Pinchbeck said:
“We’ve been urging Government, and the Treasury in particular, to take the opportunity provided by falling wholesale prices reducing the cost of the scheme and hold the EPG at £2,500 to provide much needed respite for customers.
“The figures published show how much could be saved in each constituency, if this happens. What’s key is that any decision is announced soon to avoid confusion for customers and to ensure it can be implemented in time.”
The dataset can be found here
Notes to editors
- Energy UK is the trade association for the energy industry with over 100 members – from established FTSE 100 companies right through to new, growing suppliers, generators and service providers across energy, transport, heat and technology. Our members deliver nearly 80% of the UK’s power generation and over 95% of the energy supply for 28 million UK homes as well as businesses. The sector invests £13bn annually and delivers nearly £30bn in gross value – on top of the nearly £100bn in economic activity through its supply chain and interaction with other sectors. The energy industry is key to delivering growth and plans to invest £100bn over the course of this decade in new energy sources. The energy sector supports 700,000 jobs in every corner of the country. Energy UK plays a key role in ensuring we attract and retain a diverse workforce. In addition to our Young Energy Professionals Forum, which has over 2,000 members representing over 350 organisations, we are a founding member of TIDE, an industry-wide taskforce to tackle Inclusion and Diversity across energy.