Energy bills price increase: Customers warned of changes coming in January 2023 - how will it affect me?

The price increase is set to impact 12 ‘energy regions’ and different suppliers across the UK - check if you’re affected
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Major energy suppliers across the UK have reportedly been contacting customers about a price increase that will start in the new year. According to BBC News, some of Britain’s biggest providers say they are making changes to their prices per unit from January 1, 2023.

At a time when the cost of living has already rocketed, many customers are worried to hear that their energy bill could rise yet again. But the good news is that the changes will likely add only pennies, and not pounds, to bills.

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The changes are set to affect 12 “energy regions” across the UK from the start of January. It means that providers are allowed to put their prices up to these new maximum levels for gas and electricity.

The government’s Energy Price Guarantee means that the average customer on a standard variable tariff pays 34p per kilowatt hour (kWh) for electricity and 10.3p per kWh for gas. At those rates, a household with typical energy use will pay £2,500 a year.

But the rates are only an average. There are different rates depending on which of the 12 regions of Britain you live in and how you pay your bills, whether that be by direct debit, from regular bills, or on a prepayment meter.

The Government has updated the Energy Price Guarantee rates from January 1, 2023 so suppliers have been allowed to make small price changes for almost every customer - here’s what you need to know.

Which energy suppliers are making changes?

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Bulb, EDF, British Gas, Scottish Power and Shell have confirmed to BBC News that they would be passing on the changes allowed by the government in full to customers.

Octopus said it would pass on cuts, but not rises, to customers. The firm said it would absorb the increases, except for "Economy 7" customers. E.ON is making changes to direct debit and billed customers, but not increasing rates for prepayment customers.

How much will energy bills increase by in January?

The changes are only fractions of a penny in general, so customers are being urged not to panic if they receive an email about a price increase. It will vary according to which energy “region” you live in though.

The biggest changes are for customers paying in monthly or quarterly bills for their energy. Prices are increasing in all of the 14 areas for both gas and electricity with the biggest changes for those living in Merseyside, North Wales and London - in these areas, prices for electricity will increase by more than 1p per kWh.

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The billed rate in Merseyside will be the highest in the UK at 38.26p per kWh, more than 4p above the government’s quoted average rate of 34p. Direct debit customers in Merseyside and North Wales will see the electricity unit rate they are allowed to be charged rise by 0.4p, while people in the northern area across the North East of England will see their electricity unit price decrease by 0.4p.

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