Calculate the old and new cost of the energy your household actually uses, then subtract the old total from the new total. For each fuel, multiply every usage band in kilowatt-hours (kWh) by its unit rate, add daily standing or supply charges for the exact billing days, include applicable taxes and fees, and subtract credits or discounts. The difference is your estimated price shock.
Average price-cap figures are illustrations, not personal bill forecasts. Your result depends on consumption, tariff, meter, payment method, region, billing dates and any discounts or policy changes that apply to you.
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What an energy price-shock estimate tells you
A price shock is the extra amount caused by a rate change, separated from changes in how much energy you use. To isolate the price effect, model the old and new prices against identical consumption and the same number of days. Use a full year on both sides for an annual budget or the actual start and end dates for a bill estimate.
Ofgem, Great Britain’s energy regulator, puts the relationship plainly: “The more energy you use, the higher your bill will be.” A unit-rate increase affects each kWh consumed. A standing or supply-charge increase affects every day in the period, even when usage is low.
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The method works for electricity, gas and other metered fuels, but the definitions, taxes and consumer protections are local. Great Britain’s price-cap rules should not be applied to an Australian bill or to a tariff that the cap does not cover.
Collect the figures from your bill and tariff
Start with your own bill, tariff confirmation or supplier price notice. Record the old and new values separately; do not substitute a national average when your household figures are available.
| Input | What to record | Why it matters |
|---|---|---|
| Usage | kWh for each fuel in the period; for multi-rate electricity, kWh in every band | Usage is multiplied by the applicable unit price. |
| Unit rates | Old and new price per kWh for each band | Different peak, off-peak or other time-of-use bands can have different rates. |
| Standing or supply charge | Old and new daily charge | The charge accrues by day rather than by kWh. |
| Billing dates | Exact start and end dates, or the number of days | A 28-day bill and a 365-day budget produce different fixed-charge totals. |
| Taxes and fees | VAT or other taxes, supplier fees, late-payment or service charges that apply | Some changes affect the final bill even when the energy rate is unchanged. |
| Credits and discounts | Applicable rebates, bill credits, direct-debit discounts or other reductions | Subtract only credits that are available to this household and period. |
| Usage status | Actual meter reading or estimated usage | Estimated consumption can make the result less certain and should be labelled. |
| Tariff details | Fixed or variable tariff, payment method, meter type and region | Published rates and eligibility can vary with each of these factors. |
For a published rate table, verify that the fuel, region, meter and payment method match your account. Keep a note of whether a figure is a one-time credit, a recurring rate or a temporary promotion.
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For each fuel and billing period, calculate:
Estimated cost = Σ (usage in each rate band × that band’s unit price) + (daily standing or supply charge × number of days) + applicable fees and taxes − credits or discounts.
Then calculate:
Estimated shock = new-price scenario cost − old-price scenario cost.
Use the same consumption and days in both scenarios. A positive result is an increase; a negative result is a decrease. If your supplier gives rates excluding tax but your bill includes tax, apply the same tax treatment to both scenarios before comparing them.
Single-rate shortcut
For one fuel on a single-rate tariff, the change can be calculated directly:
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Change = usage × (new unit rate − old unit rate) + days × (new daily charge − old daily charge).
This shortcut isolates rate changes when fees, taxes, credits and other adjustments are unchanged. Add any changed adjustments separately.
Multiple-rate tariffs
Economy 7 and other time-of-use tariffs require one multiplication per band. Apply the peak rate to peak kWh and the off-peak rate to off-peak kWh. Do not multiply total consumption by one blended rate unless your supplier has already provided a verified blended rate for the exact period.
Gas and electricity together
Calculate each fuel separately, then add the results. Electricity and gas normally have different unit rates, standing charges and sometimes different tax treatment. Keeping separate lines makes it easier to identify which change drives the household total.
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- Choose the comparison period. Use the actual bill dates for a bill estimate. For an annual budget, use a complete 12-month period on both sides. Write down the number of days.
- Enter consumption. Copy metered or billed kWh for gas and electricity. Split electricity into every rate band shown on the bill. Mark each figure as actual or estimated.
- Enter old prices. Record each old unit rate and the old daily standing or supply charge, including the units shown by the supplier.
- Enter new prices. Use the proposed or currently applicable rates for the same fuel, band, region, meter and payment method. If a future rate is uncertain, label it as a scenario.
- Calculate usage charges. Multiply each band’s kWh by its rate and add the bands for that fuel.
- Calculate fixed charges. Multiply each daily charge by the number of days in the period.
- Add and subtract adjustments. Include only the taxes, fees, rebates, discounts, debt repayments and credits that apply to the household and period being modelled.
- Run both scenarios. Calculate the old total and new total without changing consumption or days.
- Report the result. Show the currency increase or decrease and, when useful, the percentage change: (new total − old total) ÷ old total × 100. Keep the absolute amount prominent because a percentage can look large on a small bill.
Worked examples
Single-rate electricity example
Suppose a household uses 3,000 kWh of electricity in a year. The unit rate rises by 5 pence per kWh and the standing charge rises by 10 pence per day. These are hypothetical inputs for demonstrating the arithmetic, not a forecast.
- Unit-rate effect: 3,000 × £0.05 = £150.
- Standing-charge effect: 365 × £0.10 = £36.50.
- Total increase before other adjustments: £186.50.
If you use a 360-day budgeting convention instead, the fixed-charge effect would be £36 and the total would be £186. The difference comes solely from the day count, which is why the billing period must be specified.
Time-of-use example
Assume a hypothetical monthly bill has 180 peak kWh and 120 off-peak kWh over 30 days. The peak rate rises from 30p to 34p per kWh, the off-peak rate rises from 12p to 14p, and the standing charge rises from 50p to 55p per day.
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- Peak effect: 180 × £0.04 = £7.20.
- Off-peak effect: 120 × £0.02 = £2.40.
- Standing-charge effect: 30 × £0.05 = £1.50.
- Total hypothetical shock: £11.10 before tax or other adjustments.
Using one average rate for all 300 kWh would hide the different impact of the two bands.
Combining two fuels
For a household with a £20 electricity increase and a £12 gas increase over the same bill period, the combined energy shock is £32. Keep the fuel lines separate in your worksheet so a later gas or electricity change can be updated without rebuilding the calculation.
Great Britain: interpreting the Ofgem price cap
In Great Britain, Ofgem’s cap sets a maximum unit rate and standing charge for covered standard variable tariffs. It does not cap the total amount a household can pay: total cost rises with consumption.
Ofgem says rates and charges can vary by region, payment method, fuel and meter type. The described protection does not cover fixed tariffs, business contracts, heat networks or heating oil. Check that your account is in scope before using a cap table.
Ofgem’s Q4 2026 illustrative averages
Ofgem’s direct-debit average cap table lists the following rates for 1 October–31 December 2026:
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| Fuel | Average unit rate | Average daily standing charge | Scope and qualification |
|---|---|---|---|
| Electricity | 26.32 pence/kWh | 54.83 pence/day | Great Britain, direct debit, Q4 2026 average; not a guaranteed household rate |
| Gas | 7.97 pence/kWh | 29.68 pence/day | Great Britain, direct debit, Q4 2026 average; not a guaranteed household rate |
These values cover only that three-month period and are averages. They should not replace the rates on your bill. Ofgem also notes that comparisons with prior periods can be affected by VAT changes. Verify the latest table, your geography, payment method, meter type, fuel and applicable dates immediately before using a cap figure.
Applying a cap example without mistaking it for a bill forecast
If you use an Ofgem average solely to build a scenario, multiply it by your own kWh and add the corresponding daily charge for your own days. Do not call the result “the cap bill” or assume two households pay the same amount. A low-use home and a high-use home can face the same capped rates but very different totals.
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Australia and other jurisdictions
Australian bills use different market terminology and arrangements. The Australian Energy Regulator describes variable consumption charges, fixed supply charges, other fees and credits. Australian Government guidance recommends comparing offers against actual total usage and time-of-use patterns rather than relying on a headline rate.
For an Australian estimate, copy the bill’s supply charge, usage bands, taxes, concessions and credits exactly as labelled. Check whether usage is estimated, and identify the state or territory, meter type and payment conditions. Readers elsewhere should use their local regulator’s definitions, tax rules and consumer protections. Neither an Ofgem cap table nor an Australian bill format is universal.
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Comparing tariffs or policy scenarios
A tariff comparison is meaningful only when the assumptions are visible. Keep the consumption profile and billing days fixed, then change the unit rates, standing charges and applicable adjustments for each option.
| Comparison item | Questions to answer |
|---|---|
| Eligibility | Is the tariff available in your region, for your meter and payment method? |
| Rate structure | Are there single, peak, off-peak or other time-of-use rates? |
| Fixed charges | What daily supply or standing charge applies? |
| Usage pattern | Can you realistically move consumption into cheaper periods? |
| Fees and credits | Are discounts recurring, conditional or one-time, and are there exit or service fees? |
| Term and risk | Is the price fixed for a stated term or subject to future changes? |
| Output | What are the annual currency difference and percentage difference under the same usage profile? |
Official Australian guidance stresses that contract fit depends on overall use and time-of-use pattern. A tariff with a low off-peak rate may be unsuitable if most of your consumption occurs during expensive periods. A comparison service can be a secondary check after you have calculated your own baseline; availability and eligibility vary by location, and savings are not assured.
Handling uncertainty in a future price shock
A future bill is a scenario, not a certainty, when any input can change. Separate known values from assumptions in your worksheet.
- Estimated usage: Use the latest actual meter reading where possible. If you must use an estimate, label it and show a low, central and high consumption case.
- Seasonal demand: Heating can make winter usage unlike summer usage. For an annual budget, use a complete year or a supplier forecast that covers all seasons.
- Unconfirmed rates: Enter a proposed rate as “scenario” until the supplier or regulator confirms the effective date.
- Policy changes: Model VAT changes, rebates or relief programmes as separate cases. Do not assume a temporary credit repeats.
- Behaviour changes: A price shock may alter consumption. First calculate the pure price effect with unchanged usage; then create a separate behaviour scenario if you expect to reduce or shift demand.
A simple sensitivity table can show how much the result moves when usage is 10% lower or higher. Do not mix that sensitivity with the price-only shock; they answer different questions.
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Spreadsheet layout and checks
A spreadsheet makes updates easier when rates change. Use one row per fuel and rate band, with columns for old rate, new rate, usage, old charge, new charge and days.
| Fuel/band | Usage (kWh) | Old unit rate | New unit rate | Old usage cost | New usage cost |
|---|---|---|---|---|---|
| Electricity peak | Enter bill value | Enter old rate | Enter new rate | Usage × old rate | Usage × new rate |
| Electricity off-peak | Enter bill value | Enter old rate | Enter new rate | Usage × old rate | Usage × new rate |
| Gas | Enter bill value | Enter old rate | Enter new rate | Usage × old rate | Usage × new rate |
Below the usage rows, add old and new standing-charge totals, then separate lines for taxes, fees, credits and discounts. Check that:
- Every kWh appears once and is assigned to the correct band.
- Rates use the same unit, such as pence converted to pounds before multiplication.
- The day count matches the bill dates, including leap-year effects where relevant.
- Estimated readings are labelled.
- Credits are subtracted only once and only in the period in which they apply.
- The old and new scenarios use identical consumption and dates for a price-only comparison.
Common mistakes and how to correct them
Using the headline annual average
An average household figure cannot predict your bill. Replace it with your kWh, rates and days. Use an average only as a clearly labelled illustration.
Treating the price cap as a total-bill limit
The Great Britain cap limits covered rates and standing charges, not the amount of energy you can consume. Multiply the applicable rates by your own usage.
Ignoring standing charges
A small daily increase compounds over every day. Include it even when consumption is zero or unusually low.
Blending time-of-use rates
Peak and off-peak kWh must be calculated separately. A single rate can materially distort the result when the usage mix changes.
Comparing different periods
A winter bill and a summer bill do not isolate a price change if their usage differs. Recalculate both scenarios over the same dates or a full year.
Forgetting non-energy adjustments
Taxes, supplier fees, debt repayments, rebates and credits can change the final amount. Include only items that apply to the selected household and period, and identify one-time items.
Reporting false precision
If consumption is estimated or a future rate is provisional, round sensibly and describe the result as an estimate. More decimal places do not make uncertain inputs more accurate.
What to put in a household budget
Record the old total, the new scenario total, the absolute difference, the percentage difference and the assumptions used. A useful budget note might state: “Annual price-only scenario, 365 days, latest actual kWh, supplier rates effective on the stated date, excluding any unconfirmed rebate.” That wording lets you update one input without losing the basis of the estimate.
For cash-flow planning, convert an annual shock to a monthly planning amount only after calculating the annual total: divide by 12 for a simple budget allocation. Actual bills will still vary by season, meter reads and billing dates, so retain the annual figure as the primary comparison.
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