What is the Energy Price Guarantee?

It's a new energy support scheme announced by the government to reduce the impact of the price cap rise.

How the Energy Price Guarantee will affect you.

On 8 September, the government announced changes to how energy bills will be charged to help reduce the impact of the proposed October price cap. The new Prime Minister, Liz Truss, has said that average bills will be held at £2,500, under a scheme called the Energy Price Guarantee (EPG), for the next two years.

This means that the October price cap, announced by Ofgem (26 August) will no longer be implemented in full for customers. The government's Energy Price Guarantee limits the amount you can be charged per unit of gas or electricity. So although your total bill will still be determined by how much energy you use, your prices won't rise by as much as previously expected under the price cap.

To limit the amount customers' bills go up by, the government will compensate energy firms for the difference between the wholesale price for gas and electricity they pay and the amount they can charge customers.

From 1 October the government will supplement what customers pay for energy which means that instead of the typical household dual-fuel bill rising to £3,549, a typical household will now see an annual bill of £2,500.

​​​​​​​You will still pay for the gas and electricity you use. But the government's Energy Price Guarantee will limit the price that we can charge for each unit of energy. However, if you use more gas or electricity, you will pay more. The scheme does not cap your bill at £2,500, your bill amount is still based on how much energy you use.

The government says that it will pay for the subsidy, which means that customers will not be expected to repay the support. From 1 October customers will also receive the government's Energy Bills Support Scheme (£400) support. More information on this can be found on our EBSS webpage.

We’re working with the government and Ofgem to find out how these changes will affect our customers and will update this page when we have more information.

What this means for customers.

Prepayment meter customers.

For prepayment meter customers, the Energy Price Guarantee (EPG) will be applied to the price you pay for each unit of energy, so the money you put on your meter will last longer than would otherwise have been the case this winter. The unit price varies regionally and depends on the time of day that the energy is used but the new unit prices will comply with the government’s EPG from 1 October. We're contacting prepayment customers directly over the coming days to confirm what the EPG means for them and how, together with the Energy Bills Support Scheme (EBSS), it will affect your bills.

As is the case with the price cap, under the Energy Price Guarantee there will continue to be a small difference between the unit cost for a prepayment meter customer and other bill payers. 

Standard variable tariff (SVT) customers.

The average unit price for dual fuel customers paying by Direct Debit will be limited to 34p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from 1 October. These unit prices have been passed from the government to us to ensure that they are used to calculate bills.

The average unit price for dual fuel customers paying on receipt of their bill (cash/cheque) will be limited to 36.8p/kWh for electricity and 11.1p/kWh for gas, inclusive of VAT, from 1 October. These unit prices have been passed from the government to us to ensure that they are used to calculate bills.

We will adjust standard variable tariffs automatically. Customers on standard variable tariffs do not need to take any action to get the benefits of this Energy Price Guarantee (EPG) scheme. We're contacting SVT customers directly over the coming days to confirm what the EPG means for them and how, together with the Energy Bills Support Scheme (EBSS), it will affect your bills.

Fixed tariff customers.

For those customers on fixed rate tariffs paying by Direct Debit, a ‘floor’ unit price will come into effect on 1 October. For gas, it will average at 10.3p/kWh and for electricity at 34p/kWh. We're introducing a floor unit price because some people will have fixed at much lower prices some time ago, meaning their annual payments will already be below the £2,500 average set by the government’s Energy Price Guarantee (EPG).

Unit price reductions of up to 17p/kWh for electricity and 4.2p/kWh for gas will apply to fixed tariff customers to bring their unit prices down to, but not below, the floor unit price. Customers on fixed rate tariffs that are already below the floor unit prices will continue to enjoy those low prices, but won't receive a further discount for the duration of their fixed term.

For the small number of customers who fixed at a high rate exceeding the October Ofgem price cap of £3,549 (£3,674 paying on receipt of bill), they will receive the full discount of 16.998p for electricity and 4.2p for gas. To make sure that those customers also benefit from the EPG we will bring their fixed price down to be in line with the government's £2,500 average threshold.

We will adjust fixed tariffs automatically. Customers on fixed tariffs do not need to take any action to get the benefits of this scheme. We're contacting customers directly over the coming days to confirm what the Energy Price Guarantee (EPG) means for them and how, together with the Energy Bills Support Scheme (EBSS), it will affect their bills.

Standing charges.

For a typical dual fuel customer paying by Direct Debit, average standing charges will remain in line with the levels set by Ofgem for the default tariff cap from 1 October, at 46p per day for electricity and 28p per day for gas.

For a typical dual fuel customer paying on receipt of bill (cash/cheque), average standing charges will remain in line with the levels set by Ofgem for the default tariff cap from 1 October, at 52.4p per day for electricity and 33.5p per day for gas.

We are contacting customers directly, over the coming days, to confirm what the Energy Price Guarantee (EPG) means for them and how, together with the Energy Bills Support Scheme (EBSS), it will affect your bills.

More details on the Energy Price Guarantee.

The government website goes into more detail on the Energy Price Guarantee, saying that:

  • A typical household will save an average of £1,000 a year on their energy bills.

  • Businesses and public sector organisations will see equivalent support over the winter.

  • New plans will tackle the root causes of problems in the energy market by boosting domestic energy supply.

  • Package will boost growth and curb inflation rises.

Energy Bill Relief Scheme - Businesses and SME.

The government has announced (21 September) a new scheme that will see energy prices for non-domestic energy customers such as businesses, SME, charities and public sector organisations cut. The Energy Bill Relief Scheme (EBRS) will offer discounts for all firms for six months from 1 October 2022.

The government’s Energy Bill Relief Scheme (EBRS) will provide a discount on wholesale gas and electricity prices for all non-domestic customers whose current gas and electricity bills have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households.

The EBRS applies to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.

Will I still get the £400 discount?

The £400 discount is part of the Energy Bills Support Scheme and will still be available to everyone with a domestic electricity supply.

You can get more information on the Energy Bills Support Scheme as well as how it'll be paid out to you.

What other measures are there? 

  • A £150 non-repayable Council Tax Rebate payment for all households that are liable for Council Tax in Bands A-D in England.

  • A £650 payment will be made to more than eight million low-income households who receive Universal Credit, tax credits, pension credit and other means-tested benefits. The first payment of £326 will start appearing in people's bank accounts from 14 July. To be eligible for the first instalment, people must have started a successful benefits claim by 25 May.

  • £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax Rebate. Further details to be announced. 

  • The government is continuing with plans to expand eligibility for the Warm Home Discount and increase the rebate value to £150 each year (from £140). More detail will be published shortly in the government response to the consultation on this.

  • The Winter Fuel Payment provides between £250 and £600 help to pay heating bills for customers born before 25 September 1956.

What support is available for E.ON Next customers?

This is a worrying time for everyone as the cost of energy continues to go up. We understand that you may be struggling to pay and have a number of resources to help. 

Why are energy prices rising?

Like all energy suppliers, we buy energy from the wholesale energy market to then distribute to you, our customers. Even renewable energy needs to be bought in this way. 

The cost of energy in the market has increased significantly in recent times to an unprecedented high. Since this cost makes up a large proportion of your bill, we need to increase the prices on our price plans too.

Your Energy Price Guarantee FAQs.