Good Energy Group plc
Good Energy Group plc
09/22/2022 | Press release | Distributed by Public on 09/22/2022 11:29
The Government Energy Price Guarantee: how it works
The Government Energy Price Guarantee is a discount on the unit rates of energy provided by the government to help with the high costs of bills. Like the Energy Bill Support Scheme, you don't need to apply for the discount and you don't need to pay it back, it will be applied automatically and you will receive it from October 2022.
If the government make any further announcements about the Government Energy Price Guarantee we will update these pages. Please check here before contacting us.
What you need to know
The Government's Energy Price Guarantee is -
- A discount applied on the rate per unit of energy, which will initially be 17p/kWh for electricity and 4.2p/kWh for gas, and may differ depending on your tariff.
- Effective from 1st October.
- Applied to all household tariffs, including fixed tariffs and standard variable tariffs which are not subject to the price cap, such as Good Energy's (read more about why here).
- Subject to a region specific 'floor rate' which it will reduce the cost to, but not below.
- Applied to a weighted average of the rates of multi-rate tariffs such as Economy 7.
- Applied automatically, you do not need to apply for or request the discount.
- Funded through government money, not a loan to be paid back through energy bills.
- In place for the next two years, though the unit rates will change every three months in line with Ofgem's price cap calculations.
- In addition to the Energy Bills Support Scheme £400 discount which will be applied over six months from 1st October (read more about that here) and the Warm Home Discount which is a further £150 discount for eligible customers (if you are eligible the government will be contacting you directly).
How do I get the Government Energy Price Guarantee discount?
You don't need to apply for the scheme. It will be applied to the unit rates you are charged automatically from 1st October.
FREQUENTLY ASKED QUESTIONS:
What is the discount?
17p/kWh for electricity and 4.2p/kWh for gas, which has been calculated to bring the cost of a typical annual bill for an average customer on a price capped tariff down to £2,500.
This means the discount rate may go up or down depending on the level Ofgem sets the price cap every three months.
It is also subject to a region specific 'floor rate', below which the Government Energy Price Guarantee does not cover.
Your SVT isn't bound by the price cap, will I still get the full discount?
Yes customers on Good Energy's SVT will receive the full discount. However as the Government Energy Price Guarantee is a unit rate discount from the price cap and not a new cap this does not guarantee that our SVT prices will be in line with capped tariffs.
What is the floor rate?
It varies by region, averaging at around 34p/kWh for electricity and 10.3p/kWh for gas.
Are standing charges also being discounted?
No standing charges are not covered by the Government Energy Price Guarantee. These are still limited by the price cap for customers on capped tariffs, which does not include the Good Energy SVT. Read more about our SVT here.
I'm on a fixed tariff, will I get a discount?
The Government Energy Price Guarantee is a unit rate discount to all domestic energy tariffs, including fixed tariffs. However it is subject to a 'floor rate' below which tariffs are not discounted. This means fixed tariffs will receive the discount either in full or down to this floor rate, but if your fixed tariff is already at or below the floor rate you will not receive a discount.
How does the Energy Price Guarantee work for multi-rate tariffs?
For electricity tariffs with more than one unit rate (like Economy 7), the government discount will be applied to the weighted average of the tariff rates.
Both day and night rates will be reduced by the same percentage to ensure the incentive to use less electricity in peak hour is maintained.
This means it is possible for a customer's day rate to be above the floor level, because the lower night rate will bring the average down to the required level.
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