Home » Forums

[MSE Lawrence]

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "Ofgem the regulator is listening; good stuff" Blog.

Click reply to discuss below.

[dancingfairy]

Sounds fab with some really interesting issues raised. I hope that the regulator can implement some of the suggestions as they would be relatively simple to implement but make a big difference to people's experiences.
Go Martin!

[ncrossland]

When using switching sites, you get a more accurate estimate if you use KwH rather than £.

To work out how many KwH you use, you have to keep 12 months of bills, and go back through them and manually add up the number used.

It should be made compulsory for each bill to include the total number of KwH used over the last 12 months, and this information should be carried across suppliers (so even if you switch, it still tells you how much you've used regardless of supplier).

[harz99]

In relation to what prices (old/new) you are actually comparing on switching sites, it is time for the Regulator to set fixed dates on which general tariff increases can be made, with the proviso that the new rates must be advertised 28 days in advance.

This level of transparency would reach everyone and ensure fairness to all.

[Belnahua]

I'm not sure I 100% agree with Martin's statement on prepayment meters being unfair.

Yes, to those that struggle to pay their bills, should pay the same as those of us on ordinary meters.

However there are a quite a few people out there who can pay, but refuse to pay their bills.

One of my relatives comes to mind. He doesn't have trouble paying his bills, but never pays until he's been cut off, or about to be. He regularly has people at his door demanding payment, utility services, down to the local businesses seeking payment!

So he's been forced on to a pre pay meter; As far as I'm concerned people like that should pay through the nose for their services.

These people cost the rest of us money by having to employ debt collectors, disconnection agents, extra letters and communications; why should we pay our bills on time, and subsidise the selfish?

Again, please note, I am not slating those who have trouble paying, just those who are deliberately late in paying their bills.

[magyar]

Can I add what I think would make the biggest difference to most people.

At the moment you cannot easily compare like with like because all the suppliers have difference tarrifs e.g. standing fee/no standing fee, one price for the first x kWh and and other for the next x kWh etc. Yes, you have price comparison websites but they're only as accurate as the information you provide, and most people get quite confused by kWh etc.

The regulator should define three tariff structures, 'low', 'medium' and 'high' - and all suppliers should give a price for that tariff. This is similar to the simplification which recently took place in the rail industry.

In addition, there really should be no reason why different regions price differently.

[bunking_off]

For me the one that Martin missed is ease of switching. In an efficient market, you should be able to switch at will. In the power market, it takes upwards of 6-8 weeks. Why?

If you switch telecoms provider, it'll be done in days. When Ofcom's recent regulatory changes are implemented, you'll be able to change your mobile provider - and take your number with you - in 2 hours. For telecoms changing provider changes how your calls are routed. For energy, it's the same electrons flowing through the wires, the change is only in billing arrangement. Why should it take 8 weeks to get that sorted?

Imagine walking into Tescos and being told that yes, their beans are cheaper than Morrissons, but sorry you can't have them until October even if you ask now.

So, if you're e.g. an EDF or BG customer, you've no choice but to pay the new prices. Even if you switch onto a capped deal with another provider, you're stuck paying the increased prices until the change goes through. In my view Ofgem should get the energy delivery companies to get their act together to shorten the switching process to 8 days (7 days statutory cooling off + 1 day to implement), and if not, make it illegal to increase prices without giving 8 weeks' notice.

[magyar]

Originally Posted by bunking_off

So, if you're e.g. an EDF or BG customer, you've no choice but to pay the new prices. Even if you switch onto a capped deal with another provider, you're stuck paying the increased prices until the change goes through. In my view Ofgem should get the energy delivery companies to get their act together to shorten the switching process to 8 days (7 days statutory cooling off + 1 day to implement), and if not, make it illegal to increase prices without giving 8 weeks' notice.

Actually I don't think that's true. I was with npower until March when they put their prices up, then switched to Scottish Power. Even though the switch didn't go through until May, I only paid the previous rate - although you do have to tell your supplier of your intent to switch within 28 days I think.

Npower did accidentally bill me at the higher price but they did eventually agree to recalculate it at the original price.

[bunking_off]

Interesting....will await my EDF bill to see if it's the case.

[JimmyTheWig]

Originally Posted by magyar

At the moment you cannot easily compare like with like because all the suppliers have difference tarrifs e.g. standing fee/no standing fee, one price for the first x kWh and and other for the next x kWh etc.

Good point. I'd like to take this further.
I think we should go back to having a standing fee and a single price per unit.

I know this doesn't sound too good on the face of it, but in reality little would change.

I lived in a very small flat when British Gas first abolished the standing charge for electric. I was well chuffed as, not using much electricity, I would benefit greatly.
I was at work all day, often out in the evening and often away at weekends. I didn't cook that often. I hardly ever had the heating on.
I don't see how anyone, in an occupied property, could have used much less electricity than me.
But despite this I still paid for all the units in the higher rate and some at the lower rate. The difference in the rates multiplied by the number of units at the higher rate _is_, in effect, a standing charge.

My point is that everyone is, in effect, paying a standing charge. They just looked good by "scrapping" it.

By going back to a standing charge (and one price per unit) it would be much simpler to switch.

[edwinson]

Martin,
Very good point on LPG/oil, there appears to be no support from any quarter for people who have to use these as their major sources of energy
Rises for LPG and oil can make gas electricity price increases pale in comparison, and some people have to live in rural areas for their work.

[Belnahua]

What about coal?

Some of us use coal? And last year it was £10 a bag, which lasted 2 evenings.

So it works out about £150 a month for heating over winter last year - £900! Well over my entire annual Electricity bill!

[magyar]

Originally Posted by JimmyTheWig

Good point. I'd like to take this further.
I think we should go back to having a standing fee and a single price per unit.

Agree, provided that the standing fee was set by Ofgem and not by the companies, else it's just as confusing. The standing fee should simply cover the costs of providing billing, metering, etc. which is mostly outsourced anyway and so should be the same for all suppliers anyway.

[JimmyTheWig]

Originally Posted by Belnahua

What about coal?

Some of us use coal? And last year it was £10 a bag, which lasted 2 evenings.

So it works out about £150 a month for heating over winter last year - £900! Well over my entire annual Electricity bill!

Surely an electric heater would be cheaper?

[JimmyTheWig]

Originally Posted by magyar

Agree, provided that the standing fee was set by Ofgem and not by the companies, else it's just as confusing. The standing fee should simply cover the costs of providing billing, metering, etc. which is mostly outsourced anyway and so should be the same for all suppliers anyway.

I disagree, I'm afraid. The same company, even, could have two different standing charges for two different deals, e.g.
Deal A: £10 a month plus 9p per unit
Deal B: £5 a month plus 10p per unit

Some people would be better off on deal A, others on deal B.

But that's still simpler (and, effectively, equivalent to) to the current system of two different prices per unit for each deal.

[magyar]

Originally Posted by JimmyTheWig

I disagree, I'm afraid. The same company, even, could have two different standing charges for two different deals, e.g.
Deal A: £10 a month plus 9p per unit
Deal B: £5 a month plus 10p per unit

Some people would be better off on deal A, others on deal B.

But that's still simpler (and, effectively, equivalent to) to the current system of two different prices per unit for each deal.

True, but that's what I had in mind when I suggested Ofgem would suggest three different tariffs: Low, Medium and High use.

E.g. Low usage you'd have say £5 standing fee, Medium usage £10 standing fee and High usage £15 standing fee. People would have a reasonable feel for whether they were low, medium or high users. Suppliers then simply say what their 'unit price' is.

I'm not wedded to this idea, yours would work too.

[Chrysalis]

good to know Martin has noticed that the switching sites are inconsistent.

Regarding the complexity I think what makes it complex is they simply quote figures like you will save £100 a year instead of unit prices.

If you look at things like phones, people are quoted pence per minute costs and do understand it so I dont see why switch and compare sites cannot simply post unit prices on the comparison page instead of estimated total cost.

For simplicity the following should occur.

1 - ask for current provider and tariff if known.
2 - display all tariffs from all providers in your area with your current provider at the top, if you didnt know the current tariff you on then show all tariffs from your current provider.

Thats it far less complex, no need to type in how much you use and how much your last bill was etc.

Optionally it can ask if you want direct debit etc. so it can filter out tariffs you wont be interested in.

There should also be a big disclaimer saying 'prices displayed may not be accurate' and to check your current bill to make sure the site has up to date tariff info for your current provider.

[Chrysalis]

Originally Posted by Belnahua

I'm not sure I 100% agree with Martin's statement on prepayment meters being unfair.

Yes, to those that struggle to pay their bills, should pay the same as those of us on ordinary meters.

However there are a quite a few people out there who can pay, but refuse to pay their bills.

One of my relatives comes to mind. He doesn't have trouble paying his bills, but never pays until he's been cut off, or about to be. He regularly has people at his door demanding payment, utility services, down to the local businesses seeking payment!

So he's been forced on to a pre pay meter; As far as I'm concerned people like that should pay through the nose for their services.

These people cost the rest of us money by having to employ debt collectors, disconnection agents, extra letters and communications; why should we pay our bills on time, and subsidise the selfish?

Again, please note, I am not slating those who have trouble paying, just those who are deliberately late in paying their bills.

In that case you using a 10metre net to catch a fly, punishing the innocent for the few careless. Atlantic give discounts for prompt payments.

[Chrysalis]

Originally Posted by JimmyTheWig

My point is that everyone is, in effect, paying a standing charge. They just looked good by "scrapping" it.

By going back to a standing charge (and one price per unit) it would be much simpler to switch.

In general I agree but I know at least 1 provider has a single rate and doesnt bill a standing charge (the one im on), I think there is 2 or 3 more as well.

[munchie]

I agree with the direct debit regulation.
This morning British Gas put our monthly direct debit up by 70%.
We are never in debt with BG and have consistent meter readings.
They justify this by saying the prices have increased, therefore so must our monthly payments. But really, this is unreasonable, certainly disproportionate to likely charge.
We are already paying more than we need to, now we are paying 70% more on top of that.
They would not budge, and suggested we switch to cash/cheque payment.(thus depriving us of our 10% DD discount)
I have complained, I am hoping that the reason Ofgem doesnt hear about these complaints is because they are settled before the 8 weeks we give the company to resolve the complaint.
Though I wont hold my breath.