What’s the difference between the Energy Price Guarantee (EPG) and the Energy Price Cap?
The Energy Price Cap has been in place since 2019, to control the prices energy companies can charge domestic energy users.
The Energy Price Guarantee (EPG) temporarily replaces the Energy Price Cap, until April 2024. This additional government funding will cap the rate you’ll pay for energy bills even further.
Both schemes won’t limit how much your energy bill will cost, as that still depends on how much energy your household uses.
How are the caps on energy costs applied, and how often do they change?
The Energy Price Cap limits the amount suppliers can charge you for each unit of gas and electricity you use. It’s revised every 3 months to make sure it’s in line with inflation, as well as other changing costs.
In January 2023, the cap increased to £4,279 a year for an average household in Great Britain using both gas and electricity. From April, the cap will be set at £3,280. This is based on the typical usage of a dual fuel household paying energy bills by direct debit.
Ofgem says the reduction of the cap, which is almost £1,000, reflects recent falls in wholesale energy prices.
The Energy Price Guarantee will further protect households from the January 2023 increase, by limiting the annual bill for a typical household to £2,500 until the end of June 2023. From then, government funding to support the Energy Price Guarantee ‘cap’ will be reduced, so a typical, dual-fuel household energy bill will rise to around £3,000. The Energy Price Guarantee is currently set to end in April 2024.
Find out more about the Energy Price Guarantee.
Does the Energy Price Cap and the Energy Price Guarantee apply to all tariffs?
The Energy Price Cap applies to users on default or variable tariffs, but not if you’re on a fixed rate.
How the Energy Price Guarantee applies to you depends on what tariff you’re on – variable, fixed, if you pay by direct debit or if you pay by prepayment. Your provider should have let you know how the EPG will affect your bill. You can find out more about energy bill support by visiting the government’s website.