While the £2,500 energy price guarantee has been extended to July, the £400 energy rebate has now ended, meaning most households will see a marginal increase in their bills. However, there is a way some energy customers may be able to keep their costs lower and that’s through Octopus Energy’s Agile tariff, financial journalist Martin Lewis has said.
Speaking on the BBC Radio 5Live podcast, Mr Lewis addressed a question from a listener who asked how to keep costs low after moving into a new, more energy-expensive detached house.
The listener, Heather, who is an Octopus Energy customer, told Mr Lewis that energy costs have been considerably higher after moving from her last property, and wondered whether it was best to secure a fixed rate deal instead.
Mr Lewis pointed out that there is only one available fixed energy tariff available at present with OVO before highlighting the caution people should take before jumping into a fixed deal when energy prices are expected to drop by 20 percent in the summer.
He said: “I’m sure in the future, I’ll be talking about when new fixes come out and at what point it’s really worth it. For me, I would want to be seeing 14 or 15 percent cheaper than the current energy price guarantee before I fixed, based on current predictions.”
However, Mr Lewis continued: “But what you have access to as an Octopus customer is Octopus Agile tariff, which is not a fix, it is a variable tariff. It’s a clever variable tariff though. It prices you half hourly, the rates you pay move every half hour based on wholesale rates.”
Mr Lewis explained that the tariff tracks wholesale prices but is a bit more complex than his overview. He said: “That tariff is best for people who use a lot of energy at night such as those with storage heaters or you’re charging an electric car, but currently because wholesale rates are so cheap it is generally a lot cheaper than the energy price guarantee rate.”
Mr Lewis did note, however, that if wholesale rates increase, customers will “instantly start paying more” which means there is “no certainty at all”.
Millions could save up to £266 on their broadband bills as prices rise [EXPLAINED]
Warning as Britons get court fine fraud call – the number to look for [INSIGHT]
Top 10 easy access savings accounts with high interest now [LATEST]
If non-Octopus Energy customers wanted to switch to the deal, Mr Lewis said they’d have to move to the provider’s standard tariff first and then onto the Agile tariff afterwards.
Mr Lewis said: “That’s a bit more of a ‘casino’ tariff but currently, it’s very cheap.”
The tariff also includes a “Plunge Pricing” feature that alerts customers when prices go negative so they can then be paid for the electricity they use.
This occurs when there is too much energy generated on the grid and rather than turn equipment off, it’s easier for the National Grid to send the energy cheaply onto the grid and pass on the savings to the end user.
Due to market volatility, Octopus Energy has said they may need to restrict daily sign-ups for the tariff. People are still able to sign up, however, and will be informed if they’ll be able to join Agile.
The energy provider noted: “In Winter ’22-’23, a typical household on Agile paid around 35p/kWh on average (a little more than the average variable tariff).
“Agile prices can spike up to 100p/kWh any time – that’s three times higher than most customers are paying right now.”
It added: “This tariff is best suited to customers who can shift large amounts of their energy use to avoid these expensive peaks, often by using smart home technologies like solar and batteries.”
How is Octopus Energy helping customers with energy costs?
As part of its campaign to help its customers that are struggling or worried about paying for energy while high prices persist, Octopus Energy set up a £15million ‘Octo Assist Fund’. The scheme offers help in multiple ways based on the circumstances and needs of the customer who’s requested it.
Support includes access to existing schemes, monetary support from the fund, and personalised account support, such as credit returns and payment holidays.
It can also provide free electric blankets and a loan of a thermal imagery camera to find any heat leaks the property might have.
Source: Read Full Article