Wholesale gas prices have almost halved since June!!!!!!!

1carminestocky

I think the fact that Ofgem refused to appear on the show speaks volumes.

backfoot

mech wrote: »

I moved just the retail prices down 24p. If all their other costs per unit (including profit) came to 24p/therm (0.82p/kWh), that stepped dark red line would be approximately what they paid for gas over an extended period. I assumed their costs hadn't significantly changed over the past few years.

A couple of points. If I use CE6 prices now, for a medium user, I get a price of around 115p per therm. I don't see anywhere near that on your retail price line.

I will look at the 24p adjustment a bit further,but if as you say,it includes profit,then it is flawed as it is the profit element which we are trying to ascertain is reasonable or not.I can accept other fixed costs as an adjustment but not the profit itself.

1carminestocky

backfoot wrote: »

A couple of points. If I use CE6 prices now, for a medium user, I get a price of around 115p per therm. I don't see anywhere near that on your retail price line.

I will look at the 24p adjustment a bit further,but if as you say,it includes profit,then it is flawed as it is the profit element which we are trying to ascertain is reasonable or not.I can accept other fixed costs as an adjustment but not the profit itself.

I'm glad Mech doesn't appear to be blinding you with science, backfoot (he is me, that graph resembles some sort of spirograph project gone wrong to me ).

Joking aside, I really do admire Mech's loyalty to his employers, I hope he is appropriately rewarded...

backfoot

Mech,

Even now the maximum retail price shown on your graph is 72p per therm. Your adjustment of 24p for operating costs implies a op.cost/revenue ratio of 25%. The actual figure is more like 12% (source 2007 residential results).

It looks like you have overstated the adjustment by at least 12p, notwithstanding that the line looks low in the first place.

backfoot

1carminestocky wrote: »

I'm glad Mech doesn't appear to be blinding you with science, backfoot (he is me, that graph resembles some sort of spirograph project gone wrong to me ).

It is overcomplicated.One line for the wholesale price, one for the oil price and one for the correct retail price is all we need. The 'incorrect' 24p adjustment is irrelevant as it is the respective movement in the lines and the overall gap which would be most revealing.

I like being blinded with science.I have always had a knack of seeing through it.;)

1carminestocky

backfoot wrote: »

It is overcomplicated.One line for the wholesale price, one for the oil price and one for the correct retail price is all we need. The 'incorrect' 24p adjustment is irrelevant as it is the respective movement in the lines and the overall gap which would be most revealing.

I like being blinded with science.I have always had a knack of seeing through it.;)

I've copied it and emailed it to a very genned up friend of mine for his response (he works in the industry but is only too happy to tell it like it is). It means absolutely nothing to me, I'm afraid, and judging by the paucity of responses to it, I wouldn't appear to be on my own.

iamesbo

1carminestocky wrote: »

I think the fact that Ofgem refused to appear on the show speaks volumes.

Exactly it is disgusting, too cowardly to defend their own criminal failure.

I would sack them for that alone. That's before I banged them in prison.

BallandChain

lol Iamesbo! Don't hold back....

mech_2

backfoot wrote: »

Mech,

Even now the maximum retail price shown on your graph is 72p per therm. Your adjustment of 24p for operating costs implies a op.cost/revenue ratio of 25%. The actual figure is more like 12% (source 2007 residential results).

It looks like you have overstated the adjustment by at least 12p, notwithstanding that the line looks low in the first place.

I'm not sure how you arrive at that figure.

Residential gas revenue for 2007 (£m): 4296
Transportation & distribution costs (£m): 1172

The latter expressed as a percentage of the former is 27.2% (before even adding on operational costs and margin neither of which are separated from electricity revenue anyway). Source: http://www.centrica.co.uk/files/results/prelim07/Performance_Indicators_Prelim_220208.xls

Anyway, as I said, the 24p figure wasn't calculated from 2007 figures. It was calculated from 2004 - 2005 data as the equivalent figures weren't published for 2007.

Yes, the graph may be a little on the low side in retrospect. The original graph was from page 6 of this PDF: http://www.centrica.com/files/results/2007_interim_slides.pdf
and as you can see, it only measures the deviation from an unspecified starting point. I made a wild guess that it started at 1.7p/kWh because that's derived from what I assume was an average gas bill in early 2005. Of course, British gas may well have been above average. The 2008 figures were extrapolated from the percentage rises widely reported.

I have made another version of the graph without the Henry Hub and without the red line. To be honest I don't think the whingers would have let me get away with not showing day-ahead, as it was a downward spike in the day-ahead spot price that revived this thread. Henry Hub was just a substitute for the oil prices as I didn't know how to scale the oil prices so that it made sense (I still don't really).

I have added a new line for average gas bills inferred from a variety of news sources over the years. Here are the figures I settled on as broadly being in agreement:
Mid to late 2005: £382.20
December '05: £413
February '06: £454
March '06: £539
Mid 2006 to early 2007: £644
Most of 2007: £555
From the beginning of 2008: £650
Latest price rises: £850

I then took off the VAT and converted them to p/therm assuming an annual usage of 22500 kWh. The result includes the standing charge - it won't be a rate that appears on a bill.

Graph:

mech_2

1carminestocky wrote: »

I'm glad Mech doesn't appear to be blinding you with science, backfoot (he is me, that graph resembles some sort of spirograph project gone wrong to me ).

Joking aside, I really do admire Mech's loyalty to his employers, I hope he is appropriately rewarded...

Even if I did work for a utility company I fail to see how it benefits them.

On the other hand, the sterling job you did for your employers by pushing Click 5 non-stop before the massive price rise must have earned you lots of commission. Two switches for all those people in a short length of time.

You see I've figured it out now. 1carminestocky works for a switching website. That's why he advocates switching as often as possible, even if not to the cheapest supplier. And why he derides capped or fixed deals at every opportunity. He's earning parasitic commission off the back of our utility bills.