'Gas and electricity prices: more rises to come? Predictions...' blog discussion

andrewsmoneysaving

I've found most interesting, information which shows which sources that the Power companies get there energy from.

So for instance, since Scottish Power seems to source most energy from coal power stations, buying green energy from them probably isn't the cheapest option.

Personally, I have gone for Scottish Power Online Fixed 2009 which is a small premium which fixes prices until the end of October 2009.

For me this was the best compromise deal on the market - I was very suspicious of British Gas' Energy Click 5 because it was too low to be true, and sure enough it's now rocketed in price and ISN'T fixed in any way!

StuartGMC

I chose for the first time to fix on a 3yr deal with BG after the rise on 1 Sept from Scottish Power (usual 25% we have all seen for their online tariff). We can and always have afforded variable pricing. The reason was that then the BG offer only carried a premium of 13.8% over the new best prices online, which looked good against historic situation for fixing over that time, which I have seen to be some 20-25% premium.

Transfer takes place on 9 Oct, but, it is interesting to see BG has now dropped the fix to Sept 2011, and replaced with fixed to Jan2012 but with a further 7.8% increase (in my region). This puts the margin to fix back to some 22%.

So, will I lose out? Provided that prices rise by an average of 14% over the 3 year duration, then no. If they drop, and the oil price and gas futures look like there may be some expectation if recession results in significant reduction in industrial and commercial consumption, then I would lose out. Exit fees of £70 on gas and £30 on electricity would be the penalties.

I maintain a thread on the Mortgage Free Wannabie board so that's where I'll post further comment in future regarding whether this first time to fix was worth it.

WelshGandalf

I'm sure it's highly relevant in normal times though these are anything but normal times.

I don't see why these aren't "normal" times in the gas & electricity markets. They have been quite volatile for the last 3 years (up AND down).

Andrewsmoneysaving - yes every supplier by law has to reveal where their energy comes from - just search for "fuel mix" on their website. I doubt that the cost to the supplier of green power changes much between different suppliers though. (See my earlier comment about obligatory renewable power)

Good luck with BG Stuart - they have by far and away the worst customer service record in the country Personally I wouldn't touch them with a barge pole - indeed I think last time I switched, BG were the cheapest, but I went for the 2nd cheapest instead and haven't regretted it.

http://news.bbc.co.uk/1/hi/business/6573929.stm wrote:

The firm's share of the electricity and gas market is 30%, but it gained more than 70% of the industry's complaints.

Chrysalis

basically I am staying away from capped deals, they tie you in and like the other poster said there is suspicoun why they would offer caps when they know prices are going to be much higher. The price comparison sites continue to be horridly inaccurate for me as well, they still get my current tariff wrong (massively overpricing it making comparisons look better than they are).

StuartGMC

WelshGandalf wrote: »

Good luck with BG Stuart - they have by far and away the worst customer service record in the country Personally I wouldn't touch them with a barge pole - indeed I think last time I switched, BG were the cheapest, but I went for the 2nd cheapest instead and haven't regretted it.

I was aware of the ratings before deciding to change.

We were with them in the past before ScottishPower and never had any problems. Called Centrica (BG) to discuss the direct debits proposed as I felt both were too low with respect to energy consumption, gave them the kWh annual consumption and they agreed; and proposed monthly payment was what I had calculated it should be to "just" match the consumption for 14229kWh pa gas and 5128kWh pa electricity.

Call answered after short delay but nothing excessive, and so far customer service has been fine for us. I'll wait to see how things progress, but to be honest, with submission of monthly online readings (I may look to do so bi-weekly for a while if possible) has meant I've rarely had any need to call an energy supplier from one year to the next.

I've had a similar conversation with Anglian Water as they decreased monthly direct debit too much based again on metered consumption; quick call later, confirmation on consumption and thus cost and all sorted.

Perhaps that's where my luck runs out, or it was just because I was increasing the monthly payments?

StuartGMC

Chrysalis wrote: »

basically I am staying away from capped deals, they tie you in and like the other poster said there is suspicoun why they would offer caps when they know prices are going to be much higher. The price comparison sites continue to be horridly inaccurate for me as well, they still get my current tariff wrong (massively overpricing it making comparisons look better than they are).

As noted I only went for the cap BECAUSE the uplift was only 13.8% cf usual differential of 22-25% based on my observations when doing checks every 6 months on comparisons (after price changes stabilize of course). I wouldn't pay that premium to cap! I fully agree that companies will have their gas future contracts in place (you can get this data easily online through to 2015) and of course UK suffers due to lack of bulkstorage unlike continental Europe, which can impact the price suppliers can get for "winter" gas. LNG deliveries and major pipeline developments will assist supply, but we're now a net importer of gas having burnt the N Sea reserves (yes I deal with the oil & gas sector in my job!) but as I said; an average increase in domestic energy prices of 14% over 3 years would seem realistic. Even if market costs reduce the £:$ is weakening so that will influence prices too.

Predicting the future - It's fun isn't it!

Have found that U-Switch was always very accurate for the price we paid based on kWh consumption annual data and it allowed specific entry for night/economy 7 data too (we have gas CH but a dual electricity meter). Others were only able to ask for % split day & night consumption. So if the data is not accurate then you are right to question output from comparison but using kWh should get the correct values?

MSE_Martin

Hi

As you'll this in this weeks email

Wholesale energy prices have now dropped - so the january price rise now looks less likely

Martin

WelshGandalf

Wholesale prices have been up and down quite a bit the last few months, been very volatile.

Personally Martin I would not go around saying "price rise less likely!" just yet... give it another week or two to see if this current dip is going to be a permanent one, or if it'll be like the other dip (or were there 2? I can't remember offhand) we had during the summer/autumn so far - which were quickly reversed. The continuing drop in oil prices however makes me hopeful that this drop in prices will continue.

The facts are that electricity futures for over a year away are at their lowest levels since May, but shorter term prices are only at their lowest since August. If the short-term prices get below May's levels and stay there... then I think we will avoid price rises. We may even see some companies raise their prices and others not.

Yes I look at the wholesale electricity prices every day as part of my job in case you hadn't figured that out yet

MSE_Martin

Hi WG...

Thanks for the note. Less likely is only a comparative phrase of course, it doesn't mean won't happen. I was only really shortcutting what i wrote in my email...

Gas & Electricity price rise now LESS likely in January. Is capping worth it?
Recession fears have driven down winter's wholesale gas & elec prices by 15-20% in the last few weeks. If this holds, next Jan's predicted 20% energy price hikes are more likely to be 0-10%. Should I cap? As the cheapest caps cost 15%ish more than the cheapest non-capped tariffs, savings are less likely. Yet if you’re near the financial brink, capping gives the security of a fixed price. Did you cap before? If you capped when I yelled “cap cap cap”, your rate's cheaper and you're likely to be saving money already, so even if prices don’t rise, you’re quids in. Much more, and how to compare and check in the Updated Guide: Gas & Electricity Related Articles: Home Phones, Grant Grabbing, Cheapest Boiler Cover

I still think we will see price rises in January but I think they will be smaller than predicted - around the 10% mark, yet of course anything can happen between now and then in such an unstable world

If i aske dyou to put your money on it where would you go

Martin

WelshGandalf

Yesterday saw a 4-6% drop in prices - 1 year's worth of electricity is now less than it cost in May. I would really like to think this is it now, that prices will not reach the levels they have been at recently. If I HAD to put money on whether or not all the big 6 suppliers will increase their prices in the next 4 months, 2 days ago I would've said yes, but now thanks to this big drop I would say no. I'd still rather sit on the fence, but then I work for a low-risk company, very reassuring in these times

Keep up the good work Martin :T