Energy prices are rising: a message for our customers
Energy prices are rising from 1 October and we’re here to support you. We’ve explained everything below, but you can also read the full details, including information about available support. If you’re struggling to pay your energy bills, please get in touch with us.
You will have heard a lot about rising energy costs recently, which we know can be really unsettling. Ofgem, the UK’s energy regulator, has just announced another significant rise in energy prices. This takes the average gas and electricity bill to £3,549 from 1 October for customers paying by Direct Debit.
We’re writing to share everything you need to know – including the support available from the Government and from us – to help you prepare for this winter.
What’s been announced and what it means
Part of Ofgem’s job is to set the price that energy suppliers, like us, can charge customers on a standard variable tariff. This is the price cap. Unfortunately, energy prices are rising for everyone and right now there are few, if any, energy deals that are meaningfully cheaper than standard variable tariffs protected by the price cap.
To be clear, your prices aren’t changing today – the price cap will come into effect from 1 October. We’ll be writing to you to explain how the prices on your standard variable tariff will be rising.
Why we’re in an energy crisis
Renewable energy has come a long way recently, but the world still depends on fossil fuels like oil and gas. The price of these can rise and fall quickly. As the world came out of the pandemic last year, increasing demand for oil and gas started pushing up the global price of energy. In February, Russia’s invasion of Ukraine made a difficult situation even worse.
Before 2022, Europe got more than a third of its gas from Russia, but this year, Russia has almost completely stopped selling gas to Europe. This means the price of energy across Europe is almost 10 times what it was a year ago.
We believe that cheaper renewable power is the future. But right now, there isn’t enough of it to stop the UK from relying on expensive gas and oil for power generation. This is made worse by the fact that the UK has a single price for all its electricity, renewable or fossil-fuel – so the price of electricity is tied to the rising price of gas.
This clearly doesn’t work in the interests of UK energy customers. While the Government is looking into this, the fact is, energy prices aren't going to come down in time for winter.
The Government needs to do even more
Back in May, we welcomed the Government’s announcement of support for energy customers. But after a further increase in energy prices, this is unfortunately now not enough.
We’ve been working together with other suppliers and the Government on a solution that would freeze household energy bills around the price cap level and spread the cost over a longer period. This has wide energy industry support, and we’re ready to get to work with the new Prime Minister in early September.
OVO is an energy supplier, not a generator
We don’t generate electricity or produce natural gas. This means, unlike the generators, we aren’t benefiting from the increase in energy prices. In fact, we’re the only major UK energy company that works this way.
When we launched in 2009, we were founded by energy customers who decided there was a better way. We didn’t want to be a ‘traditional’ energy company – so we set out with a goal to make energy cheaper, greener and simpler, for everyone.
We challenged the big, traditional energy companies to be more transparent about the prices they charged. Over the last 13 years, we’ve seen a lot of change. Not all good, but for the most part, it’s better. Our competitors have raised their game, there’s more choice, and customers are now protected by Ofgem’s price cap.
But the market remains broken in other ways – so we’re still campaigning hard to make the energy system work better for customers.
We need to reform the wholesale market. We need more renewable energy. We need to invest much, much more into the energy efficiency of our homes. Only then can we start to break the UK’s dependence on gas and exposure to its cost.
However, this won’t happen overnight – and we know millions of people need help right now.
Help available this winter
The cost of energy is going up all over the world – and prices in the UK will soon follow. We speak to over 250,000 customers on the phone every week, so we know the stress and worry this is already causing, and how many people will face genuine difficulties paying their bills this winter. But there are ways to get support if you need it.
Energy Bills Support Scheme
All households in Great Britain with an electricity supply are getting a £400 discount from the Government to help with the rising cost of energy bills. This is made up of 6 monthly instalments – £66 in October and November, then £67 every month until March. You don’t need to apply for this or pay it back. See the latest updates on our Energy Bill Support Scheme webpage.
Government Cost of Living Payment
Over 8 million eligible low-income households were automatically paid £326 from July. A second payment of £324 is coming in the autumn.
- If you receive tax credits, you’ll get your first payment of £326 in September 2022, followed by a second payment in the winter
- If you receive a qualifying disability benefit, the Government has said you’ll receive a £150 payment from 20 September 2022
- All pensioner households will receive a £300 payment as a top-up to their annual Winter Fuel Payment due across November and December
If you think you’re eligible and haven’t received one of these government payments, you can report a missing cost of living payment.
How we’re going to support you
However you pay for your energy, extra support is on its way. We’ll soon be announcing details of OVO’s Customer Support Package. A substantial set of measures to help our customers with a real and immediate need this winter. Here’s what it’ll include:
- Direct Debit relief and payment holidays for customers really struggling to pay for their energy
- Dedicated support for our customers in the most financial difficulty from a highly-trained team, including support for those in financial difficulty for the first time
- A range of free and heavily discounted products and services for customers, like smart thermostats, boiler servicing and electric blankets – prioritised for those most in need
We’ll be updating our website in September with the full details, including how you can benefit.
We’re also working with partners like MoneySavingExpert, StepChange, and National Energy Action to make sure the industry as a whole works together to help people who need it most.
However, given the scale of the problem, only the Government can provide the right level of support to make a difference.
If you’re struggling to pay your bills
As always, we want you to get in touch. We can help you in these ways:
- Payment plans tailored to your financial situation, to help you spread the cost of what’s owed over time
- Practical energy efficiency tips that could help lower your bills moving forward
- Practical advice on energy debt and where to find free, independent advice from other organisations and charities
We can also make sure you’re getting all the financial support you might be entitled to:
- The Warm Home Discount Scheme which is closed for this winter but reopens in November 2022 for support by March 2023
- The Government’s Cold Weather Payment
- The Government’s Winter Fuel Payment
We’ll do everything we can to support you
For many, times are going to be really tough. We’ll do everything we can to support you this winter, and we won’t stop pushing for a fairer, cheaper energy system.
For our customers who need to get in touch with us, we really appreciate all your patience at a very busy time for our care teams. They’re working tirelessly to support you – with many of our people going through the same things. Using your online account or our app to manage your energy account will help our teams speak to those who need our help most.
We know this has been a lot to take in and we hope it’s been helpful. We’re on a mission to transform energy, so giving your thoughts can help us do that. We’d really appreciate it.
The OVO Energy Team
Important dates for you to know
26 August: Ofgem’s new price cap announcement
1 September: Details of OVO’s Customer Support Package for customers struggling to pay their bills
5 September: New Prime Minister announced
First 2 weeks of September: We’ll write to you about what the price cap will mean for your energy prices
1 October: If you don’t have a smart meter, you can send us a meter reading online right up until 1 October. This will bring your energy account up to date before your prices change
1 October: New price cap comes into effect
October 2022 – March 2023: You’ll receive monthly payments under the Government’s Energy Bills Support Scheme