Energy Prices--A Brokers View--

fatlad1971

Hello All,
Just like to add my two pence worth to the debate regarding energy prices.
Firstly I am an energy consultant; I’ve been working in the industry for over a decade and negotiate commercial contracts for SME and public sector clients.

The price of oil is only loosely linked to the price of electricity.
The price of gas in Europe is largely linked to oil and the UK and European energy markets are interacting more by the year, this has had a knock-on effect on the price of gas in the UK. The main driver of high gas prices in the UK is lack of storage capacity.

First point
power companies responsibility is to their shareholders NOT YOU

secondly
Energy costs are falling in the medium term and will peak around Jan 09 they will steadily drop from this point , in my opinion.

Thirdly
many of the horror stories of unrelenting price increases are coming from the power companies, they want people to take long term fixed price capped tariffs, with the unit rate set when the pricing curve is at the top of its cycle; it is good business for them.

If you are a domestic energy consumer be very careful with comparison websites, many use smoke and mirrors with regards to standing charges and first and secondary rate unit rates. Remember these sites are businesses that earn commission from supplier’s .Don’t take it as gospel that a new tariff will save you money. Get out you calculator and do the maths yourself.

If you are a business customer use a established Consultant / broker and make sure they are accredited with the UIA ( http://www.uia.org.uk/ ) . Using a member of the UIA will mean your broker works to a high standard and you have full recourse if they don’t do a good job. Your consultant will also have in-depth knowledge of the market and also the pitfalls of certain suppliers.

Cardew

Firstly if "The main driver of high gas prices in the UK is lack of storage capacity." can you explain why France and Germany with 122 days and 99 days storage, against UK with 13 days, have higher gas prices than UK?

See: http://www.energy.eu/#domestic

In June 2008 for a consumption of 2000 cubic metres(approx UK average) the price of a kWh in Euros was UK = 0.048, France = 0.063, Germany = 0.082

You will note the the UK has the cheapest gas prices in Western Europe EEC countries.

Secondly - The Utilities Intermediate Association -

Exams to be sat?

Qualifications required?

How do they check the "broker works to a high standard"? Do they have field inspectors monitoring standards?

It seems these are the not very onerous requirements for membership:

ASSOCIATE MEMBERSHIP is open to organisations who normally:-

• Have been in business as a Tpi (third party intermediary) for at least two years.
• Can demonstrate that they have successfully completed several contracts for customers
• Should demonstrate effective methods of seeking knowledge and training staff.
• Should demonstrate a client base of at least five clients.

FULL MEMBERSHIP is open to organisations who:

• have been an Associate Member for at least six (6) months;
• can provide two (2) references from their customers and one (1) reference from their energy supplierscan demonstrate that their financial position is satisfactory;
• have in place and operate Satisfactory Client Care Policies and Procedures;
• have agreed to adhere to the Code of Practice.

Frankly there are hundreds of these meaningless trade associations whose main purpose is to impress the gullible.

fatlad1971

Cardew wrote: »

Firstly if "The main driver of high gas prices in the UK is lack of storage capacity." can you explain why France and Germany with 122 days and 99 days storage, against UK with 13 days, have higher gas prices than UK?

See: http://www.energy.eu/#domestic

In June 2008 for a consumption of 2000 cubic metres(approx UK average) the price of a kWh in Euros was UK = 0.048, France = 0.063, Germany = 0.082

You will note the the UK has the cheapest gas prices in Western Europe EEC countries.

Secondly - The Utilities Intermediate Association -

Exams to be sat?

Qualifications required?

How do they check the "broker works to a high standard"? Do they have field inspectors monitoring standards?

It seems these are the not very onerous requirements for membership:



Frankly there are hundreds of these meaningless trade associations whose main purpose is to impress the gullible.

Thank you very much for your input Cardew

According to this data you are offering as evidence it says the average price of gas in the UK is 7.06 pence per kWh and France is currently 5.59 pence per kWh, Also the French pay no standing charge, so i am afraid you are quite clearly wrong. Extra storage capacity acts as a buffer against market volatility.
Also this data that you are wrong representing is gas data for June,,,,, Hello June
,,Gas prices are supply driven , what do you think the need is for gas in June.

It also clearly states in this web page that our electricity unit rate is considerably higher than France. Once again the French pay no metering charges for domestic consumption.

French business/ commercial energy is as much as 30% cheaper than the UK.

So clearly you haven't got a clue as to what you are talking about.

With regards to the UIA
If you had bothered to read the information available on there Website you would know that only the UIA offers a legal recourse to customers of members who have been misrepresented. No other body is doing that.
UIA members have also helped Berr with recommendations for the new energy ombudsman , to make it fairer and easier for SME businesses to have recourse to energy company tactics.

The only person with the brass neck to say energy prices in this country are cheap is an energy company employee or someone who should be under a care in the community order of some sort.

Do you work for an energy supplier Cardew ?

1carminestocky

Cardew has always staunchly maintained he has never worked for an energy company (he's very keen on BGs products, though, which he is of course entirely at liberty to be, lol), although he hasn't confirmed he doesn't/has never worked in a related industry...

Choc

fatlad1971 wrote: »

Hello All,
Just like to add my two pence worth to the debate regarding energy prices.
Firstly I am an energy consultant; I’ve been working in the industry for over a decade and negotiate commercial contracts for SME and public sector clients.

The price of oil is only loosely linked to the price of electricity.
The price of gas in Europe is largely linked to oil and the UK and European energy markets are interacting more by the year, this has had a knock-on effect on the price of gas in the UK. The main driver of high gas prices in the UK is lack of storage capacity.

First point
power companies responsibility is to their shareholders NOT YOU

secondly
Energy costs are falling in the medium term and will peak around Jan 09 they will steadily drop from this point , in my opinion.

Thirdly
many of the horror stories of unrelenting price increases are coming from the power companies, they want people to take long term fixed price capped tariffs, with the unit rate set when the pricing curve is at the top of its cycle; it is good business for them.

If you are a domestic energy consumer be very careful with comparison websites, many use smoke and mirrors with regards to standing charges and first and secondary rate unit rates. Remember these sites are businesses that earn commission from supplier’s .Don’t take it as gospel that a new tariff will save you money. Get out you calculator and do the maths yourself.

If you are a business customer use a established Consultant / broker and make sure they are accredited with the UIA ( http://www.uia.org.uk/ ) . Using a member of the UIA will mean your broker works to a high standard and you have full recourse if they don’t do a good job. Your consultant will also have in-depth knowledge of the market and also the pitfalls of certain suppliers.

Hi fatlad, good to see someone on this forum with upto date knowlegde of the biz sector.Im sure i will be picking your brains in the future. I agree also with your comment on the price drop coming for next year. BG bangs huge increase and then tries but scare the market into capping.Lets see who gets egg on their face.


Mark

fatlad1971

1carminestocky wrote: »

Cardew has always staunchly maintained he has never worked for an energy company (he's very keen on BGs products, though, which he is of course entirely at liberty to be, lol), although he hasn't confirmed he doesn't/has never worked in a related industry...

Just though it a little odd that he would attack what is in essence excepted fact within the industry.

I come on here with no Axe to grind, im not touting for business as i work mainly in group , industrial and public sector energy procurement and im not expecting many clients to be using these boards.
I just don't wont to see people tieing themselves into longterm capped price deals that may in the long run prove very costly

One more thing for those that are intrested one of the commercial suppliers ( mentioned on here a few times) MAY i repeat MAY be going tits up in the next few days. It that happens and you are a customer of this company who has been automatically renewed at high rates, get out quick during the confusion and get yourself into a 12or 24 month deal as prices are dropping

1carminestocky

fatlad1971 wrote: »

Just though it a little odd that he would attack what is in essence excepted fact within the industry.

I come on here with no Axe to grind, im not touting for business as i work mainly in group , industrial and public sector energy procurement and im not expecting many clients to be using these boards.
I just don't wont to see people tieing themselves into longterm capped price deals that may in the long run prove very costly

One more thing for those that are intrested one of the commercial suppliers ( mentioned on here a few times) MAY i repeat MAY be going tits up in the next few days. It that happens and you are a customer of this company who has been automatically renewed at high rates, get out quick during the confusion and get yourself into a 12or 24 month deal as prices are dropping

He's not keen on people querying his knowledge. Takes it very badly, in fact. It's an ego thang, I believe...:p

BusinessEnergyBroker

Hey Fatlad

If you are a business customer use a established Consultant / broker and make sure they are accredited with the UIA ( http://www.uia.org.uk/ ) . Using a member of the UIA will mean your broker works to a high standard and you have full recourse if they don’t do a good job. Your consultant will also have in-depth knowledge of the market and also the pitfalls of certain suppliers.

You cannot be serious.

The reason that we didn't join is because the whole set up of the UIA is a complete joke. I am fully aware of a number of brokers that are UIA members that firstly know sod all about the utility market, secondly who do not follow the code of practise that they have agreed to and thirdly and most importantly are actually prepared to illegally reconnect commercial gas and electricity supplies when suppliers have specifically disconnected them for debt.

No theft of gas or electricity issue there then?

I personally know a client that has been threatened with court action because of the arrangements made by the UIA member concerned.

The UIA is a laughing stock within the broker industry and they already know this. Its why they only have 15 members. Explain why none of the suppliers really support it?

They are not the FSA and never will be and even with regualtions like that the FSA impliment there would still be rogue companies.

There are a few companies on there that are decent however there are also members that I wouldn't touch with a very long barge pole. I would rather generate electricity by spending all day on a treadmill with a dynamo than use their service.

I hope the other members of this site note this information and go and speak to a number of brokers and suppliers and compare prices, service and advice.

UIA dont make me laugh :rotfl:

fatlad1971

1carminestocky wrote: »

He's not keen on people querying his knowledge. Takes it very badly, in fact. It's an ego thang, I believe...:p

He is not gunna like me then

fatlad1971

BusinessEnergyBroker wrote: »

Hey Fatlad



You cannot be serious.

The reason that we didn't join is becasue the whole set up of the UIA is a complete joke. I am fully aware of a number of brokers that are UIA members that firstly know sod all about the utility market, secondly who do not follow the code of practise that they have agreed to and thirdly and most importantly are actually prepared to illegally reconnect commercial gas and electricity supplies when suppliers have specifically disconnected them for debt.

I personally know a client that has been threatened with court action because of the arrangements made by the UIA member concerned.

The UIA is a laughing stock within the broker industry and they already know this. Its why they only have 15 members. Explain why none of the suppliers really support it?

They are not the FSA and never will be and even with regualtions like that the FSA impliment there would still be rogue companies.

There are a few companies on there that are decent however there are also members that I wouldn't touch with a very long barge pole. I would rather generate electricity by spending all day on a treadmill with a dynamo than use their service.

I hope the other members of this site note this information and go and speak to a number of brokers and suppliers and compare prices, service and advice.

UIA dont make me laugh :rotfl:

Interesting points

Firstly my company is a member of the UIA and we have a seat on the council , its only fair that i state this from the off

All the members of the UIA are what energy suppliers call first tier brokers
ie most manage very large portfolios

As for the rest , it just seems an attack

All the big six as well as the vast majority of niche players within the energy supply sector engage with and take advice from the UIA.
I personally sat with the shadow energy secretary earlier this summer as well as representatives from virtually all UK suppliers to discuss and advise on the remit of the new consumer focus group ( will replace energy watch).

The UIA is a throughly respected body within the industry , the only people who fear us are the dodgy brokers that we are closing down and referring to the office of fair trading on almost a weekly basis.

fatlad1971

Choc wrote: »

Hi fatlad, good to see someone on this forum with upto date knowlegde of the biz sector.Im sure i will be picking your brains in the future. I agree also with your comment on the price drop coming for next year. BG bangs huge increase and then tries but scare the market into capping.Lets see who gets egg on their face.


Mark

if i can offer any advice don't hesitate to ask