In April we were able to lower our prices for a typical dual fuel home by £56 a year. But, in recent months (and as we said in July) we’ve been seeing significant increases in what it costs to supply energy. We now need to pass some of these changes on to our members. In this post, we explain what’s changing, what that means for energy bills and what’s behind the changes.
Electricity rates up, gas rates down
We’re increasing our electricity rates and lowering our gas rates. This will mean an increase to annual energy bills for most members. A typical home using both electricity and gas (as set by Ofgem, the energy regulator) will see a saving of £2 on gas and an increase of £53 on electricity. Overall, that’s an increase of £51 a year. After these changes, the average annual bill at Bulb will cost around the same as it did before we lowered our gas prices in April.
Bulb is still below the energy price caps
After these changes, Bulb remains below the energy price caps. Bulb is now £76 below the ’Default’ energy price cap, which limits the annual cost of energy for people who pay by direct debit. For Pay As You Go members, Bulb prices are £45 below the ’Prepayment’ price cap, which limits the cost of energy for people who top up.
What this means for annual energy bills
While most members will see an increase to their annual energy bill, this will vary depending on their particular set up. Our members use and pay for energy in different ways. Some people only use electricity, while others also have gas with Bulb. Some people pay monthly and others top up as they go. As we’re making more than one change, what happens to your bill will depend on how you buy energy from us. We’ll be in contact with everyone individually to explain what these changes mean for you.
For current Bulb members, gas rates will change on Thursday 1 October so they’re lowered as soon as possible. Electricity rates will change on Sunday 18 October so members have at least 30 days notice. We don’t do exit fees, so any member who is unhappy with the new rates can leave at any time without penalty.
People who switch to Bulb from 11am today (Monday 14 September) will be on the new rates straight away. You can look up rates for your area on the tariff page on the Bulb website.
What’s behind the changes
In our recent update from July, we explained that wholesale costs were on the rise in response to a recovery in energy demand as the lockdown eased. Since then, this trend has continued. Wholesale costs are now 28% higher than they were in April when we last changed our prices.
While wholesale costs are higher, changes in electricity costs have been more pronounced. So our price change doesn’t apply to gas prices, which are coming down a little.
In July’s update, we also explained how record low demand for energy during lockdown had increased network and policy costs for suppliers. As a reminder, Bulb’s contributions to Contracts for Difference (CfD) and the Feed-in Tariff (FIT) scheme are going up, along with higher Balancing Services Use of System (BSUoS) charges.
As always, let us know any thoughts or questions you have on this. Drop in on the Bulb Community.