Why has Ofgem introduced a price cap for customers on Standard variable and default tariffs? Ofgem has provided more information on its reasons for introducing a price cap on its website here. This cap follows on from the existing price cap that currently applies to customers with prepayment meters and Standard variable tariff customers who are in receipt of the Warm Home Discount.
What has Ofgem set the price cap level at? The £1,137* figure being quoted in the news is representative of a dual fuel customer paying by monthly Direct Debit based on average annual consumption. However, the price cap level depends on how much energy you use and how you pay for your energy.
*Based on customers who pay monthly by Direct Debit calculated on the Ofgem typical annual consumption values for gas of 12,000kWh and single rate electricity of 3,100kWh.
Who decides the price cap? Ofgem is responsible for setting the prices for this cap and suppliers cannot charge more than the cap for gas or electricity.
When does the price cap come into effect? 1st January 2019
How often will this price cap be updated? The next price cap will take effect on 1st April 2019 and is planned to be updated every six months after that whilst the cap is still in place. The cap will be in place until at least the end of 2020, but may be extended beyond this and as far as the end of 2023.
What is meant by a default tariff? A default tariff is a tariff that a customer moves to if they take no action when their existing fixed term tariff ends. In ScottishPower’s case, this currently relates to our Price Secure and Basic Fixed tariffs. Our Standard Variable tariff is also used as a default tariff in some cases including at the end of a fixed term tariff.
I’m on a fixed price default tariff. What does this mean for me? Our Price Secure and Basic Fixed tariffs have fixed prices, however when the price cap is introduced, we can’t charge you more than the price cap level published by Ofgem. This means that your prices may come down to ensure they don’t go above the price cap level. All other terms and conditions of your tariff remain the same.
Can I still move to another ScottishPower tariff? Yes, you can move between any of our tariffs at any time without paying exit fees - simply visit scottishpower.co.uk or call 0800 027 0072**.
**Lines open Monday to Friday 8am to 10pm, Saturday 8.30am to 6pm.