MSE News: Energy price cap legislation to be revealed

Subject already covered in my post TOO RICH TO SWITCH

michaels wrote: »

MY tariff renewal is 27% higher this year, not because wholesale gas and electricity have gone up but because the govt is pandering to those who are too lazy to check the price of what they are buying so suppliers are covering themselves against having their ability to set prices constrained and are offering much less advantageous deals to those who can be bothered to shop around.

And yet they will tell you the "market is broken".

And these are so-called "conservatives" who are supposed to favour the free market and 'price discovery'. Shameful!

Meanwhile they restrict land availability and pump credit and shared-ownership money into the property market, destroying price-discovery. their latest scheme aimed at distorting the property market will cost taxpayers a further £10bn. And as house prices rise so (necessarily) do rents.

'Broken-market'. They haven't even an instinct for what it means.

michaels wrote: »

MY tariff renewal is 27% higher this year, not because wholesale gas and electricity have gone up but because the govt is pandering to those who are too lazy to check the price of what they are buying so suppliers are covering themselves against having their ability to set prices constrained and are offering much less advantageous deals to those who can be bothered to shop around.

You're making the mistake of believing what the government says.

Retail prices are indeed going up while wholesale energy hasn't. But if the energy companies were charging more, their profits would be higher - right? That extra money has to go somewhere. If their profits were higher, more companies would enter the market (barriers to entry are not high) and companies already in the market would be rolling in clover and not go bust http://www.mirror.co.uk/money/gb-energy-bust-wont-last-9351205 but quite obviously that's not happening.

So what is happening? First, wholesale energy is not the only cost of retail energy. There are others which are important - the biggest of those being Government regulation. Some examples:

1. Smart meters. FREE smart meters. FREE FREE FREE. Do you believe they're really free and a "Free Smart Meter" fairy is dropping them throughout the land? Or do you believe the actuality that its cost gets divvied up and dropped onto your bill?
2. Green Levy. BG gave the game away on this one: http://www.dailymail.co.uk/news/article-4752948/British-Gas-blames-green-taxes-12-5-price-hike.html - but remember to not believe it until it has been officially denied.
3. Schemes to improve the reliability of the Grid since intermittent renewables appeared on the scene. Schemes to produce electricity at short notice and whatever the cost https://www.theguardian.com/business/2016/dec/06/diesel-farms-national-grid-tax-breaks and schemes to use lots of electricity at short notice - http://www2.nationalgrid.com/UK/Services/Balancing-services/Reserve-services/Demand-Turn-Up/

So, if all these Government Policies are being dropped onto people's bills and aren't being as invisible as the consultants and lobbists said they would be - what's a Government to do?

Simple, blame the one of the usual suspects:

• Greedy Fat Cats
• Gnomes of Zurich
• Unions
• The Hun
• White Slave Traders

*delete as applicable/the ones that won't fly

then enact legislation to "punish" the ones left. If people were thinking the Government would identify the root cause and fix the problem at its source - well... :rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

You can't deny politicians their opportunity to virtue signal with your money!

So what's left? It's merely the age old tactic of "We've screwed up? And you've realised? Ermm...panic...erm. OH LOOK PUPPIES!!!"



Or in this case "Oh look it's greedy energy companies - don't look at us trying to buy the green vote with your money."

michaels wrote: »

On average company profits will not fall (unless they make a decent return they will not invest in the industry) so this just means less competition as prices end up all clustered very close together.

No, what will happen will those tariffs which are not protected will suffer for those which are. Initially, assuming there are going to be real cuts to the costs, that will mean fixed tariffs will rise when they're up for renewal, and more energy companies going bust if too many people have fixed terms.

People over the medium term will just move to protected variable tariffs. There are however a group of customers who can't do that - commercial customers. If the cap is going to make a real difference, then expect to see a rise of unemployment

By the time it becomes law and Ofgem get thier hands on it, it will be as weak as American beer.;)