Opaque Pricing, impossible to compare fairly

guidarufino

Last night a British Gas salesman turned up at my door unnanounced and uninvited which made me angry as I was comfortably reading a great book on the sofa and he disturbed me! Anyhoo, I digress.

Basically he was trying to get us to come back to B.Gas. I explained that we'd only recently bought the house (2 months ago), had been with NPower when we moved in and had recently switched to Eon having done a price comparison on one of the sites recommended by Martin, forget which one now. He said that the energy switching sites were all bogus and currently subject to review by the government or something. I said that Martin had recommended them all which made them good enough for me and I'd certainly take Martin's word, which is gospel, over his!

He said that B.Gas were definitely cheaper than Eon by 13% (I think) and also that they were prepared to fix our tariff for 18 months for a premium of 10%. Sounds great doesn't it? Except that of course that then only makes them 3% cheaper than our current provider, assuming B.Gas man is telling the truth about them being cheaper.

The problem is, and this is my rant and the thing I'm still fuming about, it's basically impossible to tell isn't it? Because none of the energy providers use transparent pricing. In other words, you can't just look at them and say, "right, B.Gas charge 4p per unit, NPower charge 5p per unit, S.Power 6p per unit so I'll go with B.Gas".

No of course it's not that simple. I looked at the first bill we'd received from NPower and it said something like

150 units at 5.9p
450 units at 1.9p (NB these figures are made up, I can't remember exactly what it said!)

So I grilled the unsuspecting B.Gas man about this. He claimed that B.Gas are better than all the others because they roll over to the cheaper unit price sooner than all the energy companies. So rather than paying 150 units at the higher price as above, you'd only have 50 expensive units then you go onto the cheaper unit price.

Brilliant! Aren't they lovely? So I asked him when these units re-set. In other words, how often do they put you back onto the expensive units. Is everyone still with me by the way?!!!

Once a quarter, was his answer. So each and every quarter, B.Gas charge you the higher unit price for 50 units (or whatever) and the lower price for the rest.

So you've got to ask yourself, how do the other energy companies do it? Do they also re-set every quarter, or maybe just once a year?

I told him I had no intention of changing there and then as I object to being rushed into anything. He said other people were biting his hand off to sign up. Bully for them, I told him. Why don't you leave me a price list and I will have a look and decide for myself. He told me he could only leave me a price list if I signed up?!!!

So I gave him a lecture about high pressures sales tactics and also about the evils of opaque pricing (I studied economics at uni!) He looked a bit non plussed, then a bit peeved when he realised he wasn't getting a sale.

Basically the whole thing left me really p***ed off because the whole thing's a massive scam and it's frankly a national scandal that they're allowed to get away with it. If the energy companies were forced to use transparent pricing where they just said it's ?p per unit, it would be much easier for everyone to compare prices meaning that you would have something much closer to perfect competition which would reduce prices across the board.

It's like when I was at the market yesterday. Because all the stallholders have their prices laid out, ?p per lb, it's easy to walk around and see who's the cheapest. But if they said, ?p per 368g, then ??p for the next 710g, unless you buy on a Wednesday in which case it's half price, then it gets very flipping complicated indeed!

Sorry for the length and possible nonsense in this rant but that man made me so mad last night, I really needed to get it off my chest!

McKneff

:T :T :T :T :T

couldnt have put it better myself.

amcluesent

Because of the various rates and price breaks, I found that the cheapest tariff for me on EON was the one with the standing charge, which has a flat rate for kwhs for gas and electricity. But I needed Excel to work that out, no way to do it by looking at the published tariffs.

jetski690

[quote=guidarufinoHe said that B.Gas were definitely cheaper than Eon by 13% (I think) and also that they were prepared to fix our tariff for 18 months for a premium of 10%. Sounds great doesn't it? Except that of course that then only makes them 3% cheaper than our current provider, assuming B.Gas man is telling the truth about them being cheaper.

The problem is, and this is my rant and the thing I'm still fuming about, it's basically impossible to tell isn't it? Because none of the energy providers use transparent pricing. In other words, you can't just look at them and say, "right, B.Gas charge 4p per unit, NPower charge 5p per unit, S.Power 6p per unit so I'll go with B.Gas".

No of course it's not that simple. I looked at the first bill we'd received from NPower and it said something like

150 units at 5.9p
450 units at 1.9p (NB these figures are made up, I can't remember exactly what it said!)

So I grilled the unsuspecting B.Gas man about this. He claimed that B.Gas are better than all the others because they roll over to the cheaper unit price sooner than all the energy companies. So rather than paying 150 units at the higher price as above, you'd only have 50 expensive units then you go onto the cheaper unit price.

Brilliant! Aren't they lovely? So I asked him when these units re-set. In other words, how often do they put you back onto the expensive units. Is everyone still with me by the way?!!!

Once a quarter, was his answer. So each and every quarter, B.Gas charge you the higher unit price for 50 units (or whatever) and the lower price for the rest.

So you've got to ask yourself, how do the other energy companies do it? Do they also re-set every quarter, or maybe just once a year?



Ok I'm with Npower and have been going through my own electric consumption over the past few weeks, How the units work out from Npower they state the first 728 Kwh per year are at the highest price then falls to the lowest for the remainder so when you get your first quarterly bill the first quarter of the 728 will show as 182.
Basically 728 divided by 4. Hope that helps.

guidarufino

Not really! See? This is totally the problem.

Have any clever Moneysavers out there managed to devise a spreadsheet to work this all out? I suppose with a sufficiently clever spreadsheet, you could work it all out. Problem there though is we've only been in the house for 2 months so have no idea what our consumption over the year will be. We could find out what we've used so far but as it's summer (albeit not a very warm one), that won't really tell us about what we'll use in winter. The whole thing is a total rip off and I'm really mad! :mad: :mad: :mad:

lynneinjapan

I agree, it's very hard to compare. The comparison sites do a reasonable job, but do they take into account the 5% discount that one supplier might give you for paying by direct debit while another might offer a bigger or smaller discount? There's no way of telling, as far as I can see. And then there are incentives such as Nectar and Clubcard points, which don't add up to a huge amount but it can be enough to tip the balance, especially if you exchange your Clubcard points for Deals.

whatatwit

The only way I have found to get a fair comparison is to use an actual bill (obviously tricky if you've not been in the property long).
I end up with my bits of paper and a pencil working out how much my x units in total would have cost with each company, last time I did this, there wasn't much between them.
But they do try and blind you with science....or is it baffling me with bullsh!t :eek:

DGJsaver

its a !!!!ing disgrace

labour government in name only , pandering to the huge corporations like cheap !!!!!s

moncman

I have to agree that the pricing plans are overly complicated and varied. That said, I have tried USwitch and found their calculations to be quite comprehensive. As a double check once you've found a cheaper/better deal you can compare it to your current tariff. I always have my online account open at the same time to double check that the figures used by the comparison site are the once being used to calcuate my bill.

For the high/low cost per unit, it makes little difference whether the high units are all up front or spread over 4 quarters unless you pay the bill on reciept. Monthly direct debit is the way to go and spreads the payments equally.

Unless you are a very low user you will get through all the high units at some time then start paying at the low rate. Obviously there is a break point where a standing charge and a high/low pricing schedule are exactly the same. A very low user will be best on the standing charge deal whereas a high user will benefit more from the extra low priced units they get through on a NSC deal.

UK007BullDog

I have given up with the comparison sites. even with bills going back 2 years I cannot figure out which one is the cheapest due to units, night time use etc. They all call each tariff differently, cannot find mine on those and all those different charges.

They need to be regulated just like mortgages, financial products, telephone charges etc.,....

Right now they are taking the mickey and laughing all the way to the bank...