The Energy Price Guarantee (EPG) is a temporary measure from the government that limits the amount you can be charged per unit of gas or electricity used.
Before this was put in place, there was already a measure to limit the amount energy companies can charge, called the Energy Price Cap. This was launched in 2019 and it is set every three months by energy regulator Ofgem.
The Energy Price Guarantee replaces the Energy Price Cap while it’s in place. Under the EPG, your bills will be lower than they would be under the Energy Price Cap.
The government pays energy suppliers directly for any extra gas and electricity your household uses above the Energy Price Guarantee limit where you live.
The EPG first launched in October 2022, and stated that a ‘typical’ customer on ‘medium’ usage would pay, on average, around £2,500 a year. In Northern Ireland, it is £1,950.
The amount was due to increase to £3,000 from April 2023, but in March the government announced that the current Energy Price Guarantee had been extended by three months to stay in place until June 2023. This now means that from July, the EPG is set to increase by 20% to £3,000. This is due to stay in place until April 2024.
Is the Energy Price Guarantee the maximum amount you’ll pay for energy bills?
What you pay under the EPG will be determined by where you live, how much energy you use and how you pay your bill.
You might pay less, but you could also pay more than the cap of £2,500 a year, because it refers to a ‘typical’ household with ‘average’ energy use. So, it’s a ballpark figure in essence.
Also, the EPG applies if you’re on a standard variable tariff. If you have a set tariff with your energy supplier, it is only relevant if your tariff is higher than their standard variable tariff.
There’s still a standing charge payable by gas and electricity users on default tariffs, that remains capped at the level set by Ofgem from October until the end of March 2023. This works out around £270 a year if you use gas and electricity and pay by direct debit. The current rates are set at 46p a day for electricity and 28p for gas.
If you have a prepayment meter, you’ll pay around £80 a year more than people on direct debit, while those who pay after receiving a bill are charged around 6% more. You can find out more about how the EPG is applied to different tariffs and payments here.
How does the Energy Price Guarantee vary between parts of the UK?
The EPG varies from region to region within the UK, according to rates set by Ofgem.
Transport costs to deliver gas and electricity are considered. For example, people who live in North Wales are currently paying more than those living in London. The lowest cost levels are in Northern England and East Midlands.
You can find out how your regional rate compares here.
