Energy Price Guarantee scheme: NI energy suppliers to reduce prices

The amount gas and electricity suppliers can charge customers per unit has been capped

Energy companies in Northern Ireland are reducing prices for households on Tuesday as a consequence of the Energy Price Guarantee.

The UK government scheme will cap the price for a unit of gas and electricity from October 2022 to April 2023.

The support will reduce bills by up to 19.9p per kilowatt hour (kWh) for electricity and 4.8p/kWh for gas.

The government previously said homes using a typical amount of gas and electricity would pay £2,500 annually.

The cap was first announced in September by the then-Prime Minister Liz Truss, who initially said the scheme would last for two years.

However, after a turbulent few weeks for the UK economy, the plan was scaled back and the cap is now due to end in April 2023.

The Consumer Council has a free online Energy Price Comparison Tool, which allows users to see the available tariffs from all suppliers in one place and it advised that customers can switch without any interruption to supply.

How does it work?

Under the government scheme, householders will still pay for all the gas and electricity they use.

But the government's Energy Price Guarantee will now limit the price that suppliers can charge for each unit of energy.

Some customers' bills will still exceed £2,500 this year, if they use more energy than the typical household.

Kevin Shiels, the utility regulator's director of retail and consumer protection, explained that the scheme was not a price cap.

"What [the scheme does] is reduce the amount that every household pays per unit of energy, whether it's electricity or gas.

"There's a separate scheme for electricity and one for gas and you will get that no matter what supplier you're with.

"Customers don't have to do anything to avail of this - it's applied automatically to them from 1 November and the benefit is backdated to 1 October because these schemes kicked in in the rest of the UK on 1 October."

The Energy Price Guarantee is separate from the £400 Energy Bills Support Scheme which is an additional government plan to help people with energy costs this winter.

Households are due to be credited with the £400 payment automatically.

But Mr Shiels said there were still decisions to be made about how customers would get this money.

"In the rest of the UK, customers are receiving the payment in the form of six monthly payments of £67," he told the BBC's Evening Extra programme.

"The discussion in Northern Ireland is whether that type of phased payment should happen or whether we should get a one-off £400 lump sum payment."

Mr Sheils said UK government ministers were "still working that through" but he expected a decision will be made within the next few weeks.

"I'm still hopeful it will be this side of Christmas but I can't guarantee anything," he said.

What does the price guarantee mean for my bill?

BBC News NI asked the main electricity and gas suppliers in Northern Ireland what the cap on prices would mean for their customers.

Electricity

• Power NI: Customers will see electricity prices fall by 10% as a result of the energy price cap, which will more than reverse a 60% increase that would otherwise have applied from Tuesday

• SSE Airtricity: The support discount will be applied per kWh used, therefore customers' savings will depend on how much energy they use.

• Electric Ireland: Customers will save 19.91p on average per unit, which equates to about a 55% decrease on energy bills from Tuesday - it also equates to a saving of about £53 a month on an average residential electricity bill

• Budget Energy: It is reducing the unit rate of electricity by 19.908p per kWh. How much a customer saves is dependent upon usage but for an average customer using 3500 kWh a year the saving will be about £595 including VAT

• Click Energy: Domestic customers will benefit from a 54.72% decrease in prices from Tuesday

Gas

• Firmus: Domestic customers in Greater Belfast will benefit from a discount of 26% while those in the Ten Towns network will get 27% off - the estimated savings are about £11.70 a week

• SSE Airtricity: The support discount will be applied per kWh used, therefore customers savings will depend on how much energy they use

What are consumer experts advising?

"Consumers in Northern Ireland will welcome the Energy Price Guarantee as it will reduce their electricity and gas bills," said Peter McClenaghan of the Consumer Council.

"The scheme will apply a discount to the unit prices of electricity and gas and all suppliers will apply the same discount."

However, Mr McClenaghan said that would mean that some energy suppliers' prices "will still be much higher than others".

He encouraged customers to shop around and compare tariffs from different suppliers to make sure they are getting the best price per unit.

By switching to a supplier with a lower tariff, he said some households "could make savings of over £500".

Mr McClenaghan added: "Consumers should know that their exact electricity and gas bills will still depend on how much energy they use - as the scheme is a discount - not a price cap.

"We also encourage any consumers who are struggling to pay their energy bills or to top-up their meter, to contact their supplier directly for help and information."

'Afraid people are going to lose out'

Sinead Quinn from Derry Against Fuel Poverty told BBC Radio Ulster's Good Morning Ulster programme on Tuesday that she is afraid some people may miss out on saving money.

"The amount of money that people could save is phenomenal, but the biggest issue that I have is that they will have to switch [suppliers] to get that," Ms Quinn said.

"I don't necessarily think that when everyone heard about the energy price guarantee that they thought that would have to happen.

"I think people just thought it would be automatic and it would be uniform across all suppliers, and I'm worried people are going to lose out on a lot of saving."

Ms Quinn fears people, particularly older people, could lose out because they "aren't aware, don't do the internet or are afraid to switch".

Power NI disruption

On Monday, Power NI keypad customers reported having their electricity cut off when topping up and changing their tariff to the new lower rates.

The company told BBC News NI that some customers were "having some difficulties" getting their 40-60-digit tariff change code.

A spokesperson said: "We apologise for any inconvenience this is causing.

"We are working to get this resolved as a matter of urgency and would ask those customers affected to email [e-mail] with 'Keypad' in the subject line and we will get back to you as soon as possible."

It is understood the problem has primarily affected app users and the reason the number of households affected is so high is due to large numbers changing to the discounted tariff at once.

Fuel Poverty Hardship Fund

On Tuesday, Belfast City Council passed a proposal for a Fuel Poverty Hardship Fund, which would involve one-off £100 payments being made to those most in need.

The proposal was put forward by Green Party councillor Anthony Flynn.

He said "I am glad that council has agreed our proposal today to set up an emergency scheme, intended to provide much needed support for vulnerable people and families this winter who are due to face immense hardship."

A further report detailing administration of the scheme will come over the next few weeks.