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I am trying to understand how the published headline OFGEM price cap is derived.

It depends on:
1. Average benchmark consumptions of gas and electricity, which bounces around every six months.
2. Region, there are currently 14 all at different rates.
3. Different payment methods. Currently three.
4. Mixture of gas and electricity. % mix unpublished.
5. Perhaps something else.

With all this variability how in the blazes do they publish one headline figure, currently £1277? I can't see how to relate this to my actual consumption.

OFGEM Letter
 

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I am trying to understand how the published headline OFGEM price cap is derived.

It depends on:
1. Average benchmark consumptions of gas and electricity, which bounces around every six months.
2. Region, there are currently 14 all at different rates.
3. Different payment methods. Currently three.
4. Mixture of gas and electricity. % mix unpublished.
5. Perhaps something else.

With all this variability how in the blazes do they publish one headline figure, currently £1277? I can't see how to relate this to my actual consumption.

OFGEM Letter
Surely, there is a big clue in the Notes.

The level of the cap shown is for a dual fuel, direct debit customer, calculated using the latest Typical Domestic Consumption Values (TDCVs). All values rounded to the nearest £.

2On 1 April 2020 Ofgem decided to decrease the Typical Domestic Consumption Values (TDCVs) for electricity to reflect continued decreases in consumption for electricity and to keep the TDCV’s for gas unchanged.

If you happen to use the TDCVs for electricity and gas then your supplier would charge you £1277/year or less. Use more: pay more, use less: pay less. That said, I accept that a Martian looking down at the Ofgem document would probably conclude that there is no intelligent life on Earth.

Edit:

There is a long thread about it here:

 

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At least it makes it quick to compare rates and avoid the excessive ones for people who find calculations too much trouble.
 

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And those values are…….?
The values shown include VAT, and are expressed for the current Typical Domestic Consumption Values (TDCV) of 2,900kWh of electricity, 12,000kWh of gas, and 4,200kWh of electricity for Economy 7. The price cap is a cap on a unit of gas and electricity, with standing charges taken into account.
 
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