#energypriceguarantee — Public Fediverse posts

Martin Lewis has say as Ofgem cuts energy price cap and July date that bills will drop is revealed | The Independent
#CostOfGreedCrisis
#CostOfLivingCrisis
#Energy
#EnergyBills
#EnergyPriceCap
#Ofgem
#EnergyBillsSupportEnding
#EnergyBillsSupport
#EnergySecuritySecretary
#Shapps
#FossilFuels
#EnergyPriceGuarantee
#EnergyPriceGuaranteeEnding
#FuelPoverty
#Poverty
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https://www.independent.co.uk/news/uk/home-news/new-energy-price-cap-ofgem-july-2023-b2344701.html

The #EnergyPriceGuarantee provides support to households in a non-targeted fashion. As a result, it is very costly for taxpayers. Alternatives could have been implemented that would have been cheaper and much more targeted. https://www.theguardian.com/society/2023/feb/28/pressure-jeremy-hunt-as-2m-more-households-fall-into-fuel-poverty

The #EnergyPriceGuarantee provides support to households in a non-targeted fashion. As a result, it is very costly for taxpayers. Alternatives could have been implemented that would have been implementable, cheaper and much more targeted.

https://www.theguardian.com/society/2023/feb/28/pressure-jeremy-hunt-as-2m-more-households-fall-into-fuel-poverty

I am wondering whether any journalist will uncover three things:
a) if the property has an EPC
b) what the energy efficiency/CO2 rating
c) how much this property benefits from the #EnergyPriceGuarantee
My guess is: yes, its bad and £4000.
https://www.theguardian.com/politics/2023/feb/17/boris-johnson-agrees-to-buy-4m-nine-bed-georgian-manor-house-with-moat

Just remind yourself, we are comparing these two homes...

The #EnergyPriceGuarantee is subsidizing disproportionately the energy consumption of a tiny set of households.

As a society we need to pay that cost.

How? Well, its either #taxation, #austerity or #debt

Let me add some more perspective: the # of households in the top energy/top income bracket is around 14,000.

So these 14,000 households benefit at least 5 times as much from the #EPG than more than 12 million others.

What we see is: the #EPG reduces bills a lot relative to market prices.

But still, bills would go up A LOT relative to 2021.

We are talking about at least GBP 1,300 for the average household. But again, lets look under the hood.

The #EnergyPriceGuarantee helps paying the #EnergyBills of the super #energy consumers in mansions earning more than 150k annual income to the tune of £5,000. That is taxpayer money!

It is 5 times as much as the help that a representative UK household gets.

But lets put some numbers first.

Lets quantify how much #taxpayer money is going to those super consumers?

As economist this falls in the category: what is the counterfactual - what would #EnergyBills have been with and without the #EnergyPriceGuarantee

The Oct 2022 price cap seems a good anchor as this would have been the guide to #energy prices coming from an independent industry regulator Ofgem.

We can simulate #EnergyBills under different prices computing who benefits & how much.

We can look very closely as the UK has good data on this.

Even in the small group of people that have a household income above than 150k, a tiny group consumes more than 5 times as much energy as the "representative" (median) UK household.

So who benefits most from the #EnergyPriceGuarantee?

Well its people that we would think are quite well off.

Supporting households in this way was a political choice.

One may say, it is "fair", prices are the same for everybody.

No discrimination.

What is the #EnergyPriceGuarantee?

#EnergyPrices are regulated in the UK by Ofgem which sets a cap two things:

Unit rate = price for each unit of #electricity and #gas.

Standing charge = how much you have to pay to be connected to the #grid.

The standing charge you have to pay even if you dont use any electricity or gas.

Ofgem announced a huge increase in the cap because - well, #Putin and #ukraine

The UK government intervened. They "capped" the cap.

Well, only the unit rate.

So I submitted some evidence for a parliamentary committee today.

That will be interesting.

It is a first.

The call for evidence was relating to the #EnergyPriceGuarantee

I will try to explain why it matters, because it tells us very much about what kind of society the UK is and how politics has handled the #EnergyCrisis #ClimateCrisis

Its all related obviously.

Please bear with me.

Point 1: We provided bill estimates under multiple price scenarios. Treating the #EnergyPriceGuarantee as the "price" I find problematic. The EPG implies a #EnergySubsidy benefitting mostly the well off that we all need to fund through #austerity and/or higher #taxation. So this