Strange letter from Swalec

crimsone

I just got an interesting letter from Swalec today... Bear in mind that this is dated at the top of the letter as being sent in October 2008

Over the last few years, SWALEC has pledged to follow a responsible pricing policy, and since 2004 we have kept energy prices as low as possible for as long as possible, and suring this period we have been one of the cheapest energy suppliers in the UK.

You may be aware of the recent media coverage highlighting the global increase in gas and oil prices, and the effect this is having on wholesale prices for the UK energy industry. UK wholesale prices have risen by 190% for electricity and 230% for gas between February 2007 and July 2008. I regret that this rise in wholesale prices means that we are unable to maintain our current price levels. From 25 August 2008 we will have to raise gas prices by 29.2% and our electricity prices by 19.2% on average. We have, however, decided to remove the standing charge for electricity pay as you go customers, so that a customer only pays for the units they consume.

We are still committed to a fair pricing policy and, accross 2008 as a whole, our customers will pay an average of £100 less than British Gas customers.

<snip> Blurb about helping reduce energy consumption and providing help and advice to vulnerable customers or those that feel they might have difficulty paying the bills </snip>

I'm sorry that we are no longer able to resist the pressure to put up prices, but hope to reduce the impact by making this help and support available to you.

There's an awful lot that doesn't add up about that letter - not least the fact that the price of oil has fallen dramatically and is continuing to fall now, but that the dates don't add up.... Here we are, 2 thirds through October (the letter being dated October and recieved this morning) and it talks of putting up prices from August. What? Am I odd for feeling that it all looks a little bit fishy?

That last paragraph, of course, reads as some kind of joke - you have to pay what you have to pay. The comparison with British Gas prices seems highly amusing too.

MarkyMarkD

It's not a joke.

Energy suppliers can notify you long after the event. But if you immediately tell them that you don't accept the price increase, and start the switching process to another supplier, the retrospective price increase is cancelled and you pay the original prices right up until your switch.

Oil prices were increasing when they made this decision, so it's not fishy. What's happened since is pretty much irrelevant.

Pink_fluff

energy prices are calclulated by the price of GAS not OIL

Premier_2

Pink_fluff wrote: »

energy prices are calclulated by the price of GAS not OIL

UK gas contracts are indexed to gas, not oil products. However, UK gas prices are linked indirectly to oil prices since the UK - as a net importer of gas - must buy part of its supply from the Continent, where wholesale gas contracts are oil-linked.

http://www.icis.com/Articles/2008/09/22/9157364/uk-european-gas-and-power-rates-continue-to-climb-for-chemical-companies.html