Got a question for Gov't energy and climate change secretary, Ed Davey?

MSE_Martin · 24 February 2015 at 5:26PM

Hi all,

Next Wed 4 March, Ed Davey, the Secretary of State for energy and climate change is coming to MSE Towers to make a policy speech and announcement, and be questioned by us, other press and energy industry campaigners.

As part of that we have arranged that some MoneySaver’s questions can be put to him (as chosen by us, don’t worry this won’t be soft soap).

So if you have a point about gas & electicity switching, or the consumer energy market that you’d like us to ask him about, please reply below.

Alternatively you can email askeddavey@moneysavingexpert.com or tweet us @MoneySavingExp with the #AskEdDavey.

We will be recording the session and answers and will ensure they’re put on the site one way or another (we’re still working out the exact format of that).

Ask away folks!

MSE Martin

Bluebirdman_of_Alcathays · 24 February 2015 at 5:49PM

Yes - when you came to open the new BGB office in Oxford, why did you not take up my offer "to take you for a beer and tell you what's really wrong with this industry"

Most people would clamour for such an opportunity :beer:

WinnyWoo · 25 February 2015 at 8:22AM

Energy price comparison rules.

The way these rules are set up means that it is impossible to get an accurate comparison because of all the assumptions that are made.

For example - they assume that after my current deal ends, I will transfer to the suppliers variable (expensive) tariff. As a money saving convert, I would never do this (unless it suited me to do so). This means that the comparison saving shown is always inaccurate.

I want to be able to easily compare price per kWh and standing charges.

footyguy · 25 February 2015 at 9:56AM

WinnyWoo wrote: »

...
I want to be able to easily compare price per kWh and standing charges.

I actually want to know what is the annual cost is likely to be i.e. after all the additions & discounts are taken into consideration.

Just looking at price per kWh and standing charges could be very misleading as many people discovered to their cost in days gone by, although admittedly the possibilities for the huge range of additions and discounts that once existed has now been curtailed.

I'm not sure how comparing price per kWh and standing charges would help you.

e.g. of these 2 options, which would you take and why?

Tariff A: 4.872p per kWh / 26.01p per day
Tariff B: 4.215p per kWh / 27.39p per day

Without working out the annual cost (or something similar), or you don't use any of that fuel at all, you cannot make an informed decision.

I agree with you about the issue over weighted results (assumes you do nothing when a tariff comes to an end), and standard results (ignores the fact your current tariff is coming to an end) can cause confusion, but there are arguments for both.

Many people who are on the ball may prefer the standard results output (like you and I do)

However the savings/oncost displayed showing standard results are never achievable since the current tariff will come to an end. Some people see that as misleading and so are unable to get an accurate comparison.

So perhaps a better solution would be to give the customer the option of which output they would prefer to see. There's nothing to stop comparison sites offering this dual format output at present, and indeed some do. So perhaps any change in requirements, if any change is required, is to require all comparison sites to provide both output options.

System · 25 February 2015 at 10:03AM

Is OFGEM fit for purpose?

Hoopie1 · 25 February 2015 at 10:33AM

I have plenty. I will start with these
1) We are now in a situation in this country where all major power generation types are subsidised - renewables are subsidised, the new nuclear projects have been guaranteed a minimum price by the government, and now gas and power are subsidised through the capacity auction. This is absurd, and politicians from all sides talking about prices simply ignores the fact that the taxpayer only pays for part of their energy at the point of use, with the remainder being extracted through taxes. All of this makes the situation very unclear. What are you planning to do to change this?
2) From the experience that I have of OFGEM, they are seem to have a lack of understanding of the industry that they are meant to regulate. Is anything going to be done to make them something more than a passive and somewhat clueless observer to a rapidly evolving industry?

footyguy · 25 February 2015 at 10:37AM

My question for Ed, which is probably already planned anyway:

What can the government do (assuming he is in power after May) to force the energy providers to cut prices proportionately when their wholesale prices fall, in a similar speed to that they raise prices when wholesale prices rise.

Some of us have long memories and remember who quickly energy providers quickly raided their prices by 30% in 2008
http://blog.moneysavingexpert.com/2008/09/30/gas-and-electricity-prices-more-rises-to-come-predictions/

The energy companies at the time said it was vital to increase prices to protect margins.
But now the argument is that energy companies by years in advance so cannot drop prices today.
Even if I were to believe that current excuse (which I don't entirely), then why can't the energy companies tell us that prices will fall in 2 years time, or whatever timeframe they claim to now buy ahead, reflecting the prices they are presumably buying at today for the future (assuming no other forced changes are applied to tariffs, such as possible government levies)?

Centrica have recently announced a drop of 35% in profits, and substantial cost saving measures as a result (including dividend cuts), due to the lower wholesale prices ... so who are they selling to at the lower price if not our suppliers (for either today or some time in the future)?

So can the government not bring in powers for Ofgem (or some other empowered organisation) to force suppliers to charge fair prices?
The market is not working fully at present, especially amongst the big 6, perhaps because of the general inertia of customers to switch to a better deal.

And I would suggest the smaller suppliers are also raking it in too, playing the same game. What I have noticed over recent times when costs have been reduced very slightly, is that as soon as the small suppliers (who have no huge number of legacy customers to earn from) are no longer competitive, they soon reduce their prices ... so demonstrating there must be room for lowering prices.

Another area I think the market is broken is based on recent reports that those who do not regularly switch are spending a collective £2.7 billion a year more than they need to
(based on average savings per customer of between £158 to £234 a year)

But does anyone really believe the industry would willingly cut their turnover by £2.7 billion in the unlikely event everyone did suddenly start switching?

Of course not.

In reality, what is currently happening is that may of us MSE'ers who do actively switch to the lowest possible tariffs are being supported by those who fail to switch and so effectively overpay.

So if everyone did start switching, yes the industry will suffer some of the pain, but so will us MSE'ers who take advantage of the best possible tariffs as they too would quickly be withdrawn to stem the loss of revenue.

So what can the government do there to help competition, as encouraging more and more to switch cannot alone be the answer as it will not give everyone the savings currently boasted of ... as they will no longer be available.

WinnyWoo · 25 February 2015 at 11:01AM

footyguy wrote: »

I actually want to know what is the annual cost is likely to be i.e. after all the additions & discounts are taken into consideration.

Just looking at price per kWh and standing charges could be very misleading as many people discovered to their cost in days gone by, although admittedly the possibilities for the huge range of additions and discounts that once existed has now been curtailed.

I'm not sure how comparing price per kWh and standing charges would help you.

e.g. of these 2 options, which would you take and why?

Tariff A: 4.872p per kWh / 26.01p per day
Tariff B: 4.215p per kWh / 27.39p per day

Without working out the annual cost (or something similar), or you don't use any of that fuel at all, you cannot make an informed decision.

It is fairly simple to calculate annual usage x p per kWh + (365x p per day). Annual usage appears on my monthly statement. In your example the second tariff would save me around £90 pa. However I am a high electricity user as there is no gas in my area. I wish I could get electricity as your example prices!

The other point about assuming reversion to standard tariff at the end of a fix means that I am never shown my true saving, and could in certain circumstances be persuaded to change to a more expensive tariff.

Smiley_Dan · 25 February 2015 at 11:11AM

What are you doing to reduce our domestic energy consumption? ECO, GDHIF et al are nowhere near ambitious enough.

Nada666 · 25 February 2015 at 11:16AM

WinnyWoo wrote: »

It is fairly simple to calculate annual usage x p per kWh + (365x p per day). Annual usage appears on my monthly statement. In your example the second tariff would save me around £90 pa. However I am a high electricity user as there is no gas in my area. I wish I could get electricity as your example prices!

The other point about assuming reversion to standard tariff at the end of a fix means that I am never shown my true saving, and could in certain circumstances be persuaded to change to a more expensive tariff.

If you are so numerate then you are perfectly capable of using the existing results table. Your complaint does not hold.

Yes users have to be told that they are to look mainly only at the total costs of the new tariffs then available. But most of them are not capable of handling a table of daily standing charges and cost per kWh. (And nor, if you think about it, are you.)

Nada666 · 25 February 2015 at 11:23AM

As to Ed Davey: why should the burden of expensive low-usage households be forced upon one or two suppliers and tariffs (instead of, before the banning of two-tier tariffs, be shared across them all.)

Why make vulnerable, innumerate customers be the only ones to subsidise low-usage households?

And what happens when more suppliers withdraw from such provision - npower have now withdrawn. When its current fixes end I am likely to be left with only one provider across the whole market.

Edited: the very next day - two threads started from First Utility customers who have discovered First Utility have now also withdrawn from offering a tariff suitable for low usage households. One of them detailing a nearly 40% increase in the cost of their energy.

Got a question for Gov't energy and climate change secretary, Ed Davey?

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