Here’s what’s happening with your prices during the energy crisis
The energy market is having crisis after crisis at the moment. If you want a quick rundown of the basics, we’ve already covered what the energy crisis is in our blog.
Now we want to let you know how we’re reacting to it, how we’ll keep you in the loop, and how the crisis could impact your prices.
We’ll always be transparent about any change we make to our service, why we’re doing it and how it could impact you.
This page was last updated: 9th March, 2022.
What you’re used to as our customer
The One Utility Bill team deals with utility suppliers and manages your bills for you, saving you time and energy
A fixed price for the length of your contract
Gas and electricity from Octopus Energy, our energy partner
What’s happening with the energy crisis now
The Standard Variable Tariff (SVT) for all suppliers is increasing in April, and could rise again in October 2022.
- SVTs are normally the most expensive rates for energy. We've always based our prices on a much cheaper tariff from our partner, Octopus Energy.
- The volatile market means Octopus Energy are unable to offer this cheaper tariff at the moment for new customers, including when your contract with us comes up for its 12 month renewal.
What's a Standard Variable Tariff?
A Standard Variable Tariff or SVT is what energy companies charge by default if you haven’t signed up to a fixed price package, for example, if you’ve inherited the supplier from a previous tenant. They’re usually the most expensive tariff.
The SVT is capped by OFGEM, the energy regulator, so suppliers can’t charge above this rate for customers on a SVT. The capped rate increases and decreases as energy supplier costs change.
We went over some of these costs in our blog when we explained the energy crisis. At the moment, wholesale energy prices (a major cost for suppliers) are changing rapidly. For example, at the moment gas costs six times what it did at this time last year.
The way that the SVT is calculated is delayed, with months passing between the calculation and the tariff price going live. So, the SVT often reflects past events before it catches up. This means that extreme events that affect underlying costs (the situation in Russia and Ukraine, for example) makes prices out of sync with what’s happening in real time.
Basically, the energy market is pretty broken at the moment.
Costs for consumers are all over the place and we’ve thought a lot about how to make this right. This includes doing some things we’ve never done before so that our customers don’t end up being punished with prices generated by a system that’s not working.
What One Utility Bill is doing about the energy crisis
Setting up all new customers on the SVT as a temporary measure, and sometimes keeping them with their incumbent supplier if that gets them a better price. We’ll move you onto a cheaper tariff as soon as they’re available from our supplier again.
We’ve factored the SVT rise in April into our current pricing. This means your prices would only change in October 2022 if the OFGEM price cap causes the SVT to rise again. In that case, you’d see an increase in your monthly bills. If it doesn’t increase, your bills won’t.
The potential price rise means we’re putting new and renewing customers onto a rolling monthly contract so you have total flexibility over what you’re paying and who you’re paying it to.
If the SVT rises in October all energy suppliers will need to change their prices to reflect that, but we don’t want anybody to feel as if we’ve locked them into a contract making payments they can’t control. If the price drops, you’ll be switched onto a cheaper tariff.
If the price rises for all suppliers in October and you’d still like to move elsewhere, you just need to give us 30 days notice.
As well as handling the complex details of the crisis for you and giving you the best possible options, we’re still dealing with your day-to-day bill payments, talking to suppliers and keeping you up to date on the crisis.
This is a lot of information, we know. We want managing your bills to be easier and less stressful, but we also want you to know what’s going on and why your prices could change.
If you’re happy for us to keep thinking about this for you, feel free to delete this information from your brain and get on with your day. We’ll get in touch if there’s anything else you need to know.
But if you’re curious, worried or have questions about the energy crisis, your bill payments, or anything else about how this might affect your account, grab us on LiveChat on our website or give us a call on 0191 622 0102.