Octopus Energy has clarified what people can expect their energy bills to look like in the coming months with a number of changes set to come into force.
Many households have been left confused about what will happen to their gas and electricity bills from this month onwards, with the Energy Bills Support Scheme (EBSS), which provided a £400 discount on energy bills over the course of six months, coming to an end. The Government also initially said that its Energy Price Guarantee, which capped the average household bill at £2,500 amid the cost of living crisis, would rise to £3,000 from April.
However, Octopus has provided reassurance for its customers as it explained that this planned increase has now been put back. The energy provider also explained what the changes to the Ofgem Price Cap will mean for some households, BirminghamLive reports.
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The energy provider said: "The planned rise of the Energy Price Guarantee to £3,000 for a typical home will now be delayed until July. This is a good result and one we've been working hard on behind the scenes.
"It's important because, while wholesale costs have fallen a long way from their peaks in August (at one point, 14 times the normal level), they are still two to three times the historic rates. However, based on current forecasts, we expect that by July prices should fall below the typical £2,500 Energy Price Guarantee level."
Octopus pointed out that a typical bill would currently be around £3,280 under Ofgem's pricing rules if the Energy Price Guarantee were not in place. Under the guarantee, the maximum rates will remain at 33.2p per unit of electricity and 10.3p per unit of gas on average across the UK.
Analysts at Cornwall Insight predict that from July, when the Energy Price Guarantee ends and Ofgem's own pricing takes effect again, the average bill will come down to an annual £2,024 with electricity at 28.39p per unit and gas at 7.51p per unit. And then, from October, it forecasts the average bill will go up a bit to £2,076 per year with electricity at 29.86p per unit and gas at 7.52p per unit.
But Octopus warned: "Due to the way Ofgem's Price Cap is calculated, rates will change slightly from April 1. These fluctuations amount to around £3 a month change to typical bills - some regions up, some down." Martin Lewis' MoneySavingExpert website added that standing charges are also going up slightly this month because energy network costs have increased due to inflation.
Confirming that the Energy Bills Support Scheme discounts stop from April, meaning that households will no longer get £66 or £67 off their energy bills each month, Octopus assured customers: "We know the end of the scheme will make it truly difficult for many. Octopus provided many tens of millions of pounds of customer support over the last year through lower prices and special funds, and we'll continue to help where we can."
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