Chancellor extends Energy Price Guarantee.

On 17 November 2022, the Chancellor, Jeremy Hunt announced in his Autumn Statement changes to the Energy Price Guarantee (EPG). The current EPG will run until 31 March 2023 and remains at an average of £2,500. From 1 April 2023 the EPG level will rise to an average of £3,000 and continue for 12 months.

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. The EPG will be implemented automatically so customers need not do anything at this time.

Energy Price Guarantee.

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 then Prime Minister, Liz Truss, said that average bills will be held at £2,500, under a scheme called the Energy Price Guarantee (EPG), for two years.

Chancellor Jeremy Hunt has since reduced the length of the EPG and changed the level at which it will be set from 1 April 2023.

The price cap, announced by Ofgem 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.

The government will supplement what customers pay for energy which means that instead of the typical household dual-fuel bill potentially rising in line with Ofgem’s price cap (£3,549 - 1 October to 31 December 2022 and £4,279 - 1 January to 31 March 2023) a typical household will now see an average annual bill of £2,500 until 31 March 2023. From 1 April 2023 the government will raise the EPG level to an average bill of £3,000 for a further 12 months.

The government’s Energy Price Guarantee is designed to keep typical bills for someone paying by Direct Debit to about £2,500 a year until 31 March 2023. However the changes to the underlying price cap (announced 28 November 2022) from regulator Ofgem will have an effect on the amount of the EPG discount. This means that most people's bills will change slightly from 1 January 2023 depending on the region they live in and the way that they pay their bills.

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 bills.. 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.

What this means for customers

Standard variable tariff (SVT) customers

The government says that the average unit price for dual fuel customers paying by Direct Debit will be 34p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from 1 October to 31 March 2023.

These are average unit prices, but the specific unit rates each customer sees will vary by region and payment type. This is to reflect the different costs to suppliers of providing energy to homes and servicing the different payment methods. Both regional variations for electricity, and payment type variations, have been adjusted by Ofgem in the most recent price cap calculations (28 November 2022). See the full list of rates by region and payment type:

We will be contacting any customers who may be negatively impacted by Ofgem’s changes to regional variations in the unit rate.

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.

Fixed tariff customers

The government has introduced 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 (1 October to 31 December 2022) and 31.8p/kWr for electricity and 6.4p/kWr for gas (1 January to 31 March 2023) 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 (1 October to 31 December 2022). From 1 January 2023 the discount will be 31.8p for electricity and 6.4p for gas (1 January to 31 March 2023) when the price cap rises to £4,279.

We will adjust fixed tariffs automatically. Customers on fixed tariffs do not need to take any action to get the benefits of this scheme which will remain at the same level as of 1 October 2022. Those fixed customers who are already below the floor will not see a benefit from the EPG.

Standing charges

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 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 52.4p per day for electricity and 33.5p per day for gas, for a typical dual fuel customer paying on receipt of bill (cash/cheque).

Ofgem's price cap.

Ofgem announced on 24 November 2022, that the price cap for customers on a standard variable tariff would increase to £4,279 from 1 January 2023. The price cap affects customers on a standard variable tariff. The price cap does not apply to you until the end of your contract if you’re on a fixed energy tariff. Find out which tariff you’re on by logging into your account. In August 2022, Ofgem announced that the review period for the price cap will be reduced from six months to every three months (quarterly).

What is the price cap?

The price cap was introduced by the government back in 2019 as backstop protection for customers on an energy tariff with standard variable rates.

Electricity and gas prices are reviewed and updated by the energy regulator Ofgem. The price cap calculated and set by Ofgem to reflect changes in industry costs. The price cap level is set for customers in England, Wales and Scotland. Retail energy prices in Northern Ireland are not subject to a cap. From 1 October 2022 the price cap level will be reviewed every three months (previously six months).

How will the Energy Bills Support Scheme work?

In May 2022 the government announced several support measures to help households with rising energy bills. The main measure, announced by the Chancellor, is £400 off electricity bills for domestic customers across England, Wales and Scotland. Known as the Energy Bills Support Scheme (EBSS) this money will start to be credited to customers accounts from 1 October 2022 in six, monthly instalments. This money does not need to be paid back.

Each energy supplier has been asked to pay customers who have an electricity supply, so this means if your electricity is with us, you'll get your payment from Sainsbury's Energy. If you only have your gas with us, then you'll get your rebate through your electricity supplier.

You'll see a discount of £66 applied to your energy bills in October and November, and £67 a month from December to March 2023.

We'll be paying the money differently, depending on how you pay for your fuel now:

  • Fixed Direct Debit customers will receive the money automatically as a deduction to their monthly Direct Debit.
  • Pay on receipt of bill customers and regular cash payment customers will see the money automatically applied as a credit to their energy accounts in the first week of each month. This will show as a credit in the payments section of their monthly bill.
  • Smart prepayment customers will see the money credited directly to their meters as a top up in the first week of each month.
  • Traditional prepayment customers will be provided with vouchers in the first week of each month. You'll need to redeem these at your usual top-up point in a similar way to the Warm Home Discount.

The government has published more information about the Energy Bills Support Scheme on their website.

Additional government support.

The government has confirmed (21 Sept) that the £400 Energy Bill Support Scheme (EBSS) will be extended to cover people such as park home or house boat residents, people who use alternative fuel and those tenants whose landlords pay for their energy via a commercial contract.

EBSS Alternative Funding.

People in England, Scotland and Wales without a direct relationship to a domestic energy supplier, including many care home residents and those living in park homes, will receive a £400 discount on their fuel bills through the Energy Bills Support Scheme Alternative Funding (EBSS Alternative Funding).

Online applications will open in January for households in England, Scotland and Wales who are eligible for the £400 EBSS Alternative Funding to submit their details, alongside a helpline for those without online access. Payments to households that meet the eligibility criteria – including people who get their energy through a commercial contract or who are off-grid – will be made by local authorities in Great Britain. This is likely to include:

  • care home residents
  • residents of park homes
  • tenants in certain private and social rented homes
  • homes supplied via private wires
  • residents of caravans and houseboats on registered sites
  • farmers living in domestic farmhouses
  • off-grid households

To make the process as simple as possible for consumers, those who are eligible for the EBSS Alternative Funding will need to submit a short online form via the government’s GOV.UK pages, with the application portal due to open in January 2023.

Alternative Fuel Payment.

The government is also providing a further £200 Alternative Fuel Payment (AFP) to help those households in Great Britain who use alternative fuels such as biomass or heating oil to meet energy costs this winter. Most households eligible for the AFP support in Great Britain, will receive payment automatically via their electricity supplier in February 2023, with no need to take any action. Those households who will need to apply for the AFP, for example because they do not have a relationship with an electricity supplier, will be able to do so in February, through the same GOV.UK portal as the one that will be used to apply for support under the EBSS Alternative Funding scheme.

Energy bills support for households in Northern Ireland.

All households in Northern Ireland will receive a single, one-off £600 payment to help with their bills. Payments will start in January 2023. This will be made up of £400 of support under the government’s Energy Bills Support Scheme Northern Ireland (EBSS NI), and £200 of support under the Alternative Fuel Payment (AFP) scheme, which will go to all households in Northern Ireland irrespective of how they heat their home.

All households in Northern Ireland will receive the support in a single payment to ensure the full benefit of the scheme is felt as soon as possible. The Northern Ireland scheme differs in this respect from EBSS in Great Britain to account for the particular nature of the NI energy market.

Administered by energy suppliers, customers who pay by Direct Debit will receive the £600 into their bank account directly. Other customers will be sent a voucher to redeem the payment, with further details of how they will work and what ID will be required to be set out shortly.

What other help is available?

  • 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 started 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.

Why are energy prices rising?

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

The cost of energy in the market has increased significantly this year 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.

Am I affected by the price cap?

If you're on our standard variable tariff, we'll be writing to you in the coming weeks to explain how these changes affect you. If you're on our Fix & Reward Tariffs, your prices will stay the same until your tariff term ends. We'll contact you when your fixed tariff term is about to end with guidance for what to do.

You can check which tariff you are on by logging in to your account.

Should I switch to another tariff?

This really does depend on what's right for you and your home. Any changes to our prices will be reflected in your dashboard in the coming weeks.

Remember that the price cap level will not increase until 1st October. This is when relevant changes to your tariff will be observed and you will start to pay any new prices as a result.

So, you still have time to think about next steps.

If you are one of our standard variable tariff customers, you will be receiving an email or letter keeping you updated with how this price cap will be affecting you with advice on what to do.

If you do decide to switch to our Fix & Reward tariffs, you'll be paying the same price for a set period of time and we have no exit fees so you still have flexibility.

Please bear in mind that we may need you to have a smart meter fitted, pay by Direct Debit and manage your account online, so please do read the small print before signing up.

We recommend checking your tariff online in the coming weeks.

It's also good to know that other factors may impact how much your energy bills cost including:

  • How you pay.
  • The type of energy meter you use.
  • Your energy usage.

There are also lots of ways you can reduce your energy usage and therefore how much you will pay. Check out these helpful tips for increasing your energy efficiency.

What support is available?

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. Here's where you can find support.

Warm Home Discount.

The Warm Home Discount is there to help those who are struggling to keep up with their energy payments. Customers on the scheme will get a one-off, annual discount of £150 (inclusive of VAT) on their electricity bill. It's a scheme supported by the government and energy suppliers. There is a deadline to apply so please check the link below.

Find out if you are eligible.

The Green Home Grant.

The Green Homes Grant is a £2 billion scheme, launched by the government, to help homeowners pay for energy saving improvements for their homes by installing measures such as wall insulation, solar panels and air source heat pumps.

This is to improve the warmth of homes, cut energy bills and help the UK to be zero-carbon by 2050.

For more information take a look at the Green Homes Grant blog from our partner E.ON Next.

Homes for Living.

Homes for Living is a scheme designed to support your mobility, wellbeing and independence, offering free and attractive home aids and equipment designed to give you more freedom in your home.

Our partner E.ON has put all the info together in a useful landing page.

The E.ON Next Energy Fund

The E.ON Next Energy Fund has been created to help customers who are experiencing financial hardship. Sainsbury's Energy is powered by E.ON Next which means our customers can also access it.

There are two ways this fund can help and support you:

  • To help with paying your gas and electricity bills through grants.
  • To replace appliances such as a cooker, fridge, fridge-freezer or washing machine if yours is broken or in poor condition.

Find out if you're eligible.

Debt advice resources.

There are also external debt advice resources you can get through Citizens Advice and StepChange.

If you are also worried about how money can have an impact on your mental health. We advise you to talk to our charity partner Mind.

Talk to Customer Service Team if you are having difficulty.

Our customer service team are here to help if you are concerned about the impact of the price cap rise on your energy bills. If you are struggling to pay, please visit our help page to find out more about how we can support you.

You can reach out to our Energy Specialists for personal advice on Facebook and Twitter, or send us an email: hi@sainsburysenergy.com.