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If Rates Drop Will Bills Go Up?

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  • brysiewysie
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    ortolickus wrote: »
    Thanks for the replies. It seems i got the maths about right or someone would have pointed it out.

    So it boils down as to whether the threshold (it's not a 'standing charge') is a daily or quarterly apportionment. On my corespondence from E.on it refers to a "quarterly" threshold, not a "daily" threshold, so i still believe that any price increase applied after i've reached that threshold during a quarter should be at the secondary rate.

    I follow the arguments that have been offered against my standpoint, i just don't happen to agree with them.

    You'll notice that on each bill there's a different number of primary units (unless each bill is an exact number of days apart). This shows it's a daily rate and over an exact quarter/year adds up to the stated amount.

    You'd be arguing a different case if the primary rate or the quantity of primary units in a period of time altered. Eon do sometimes alter the contract for the number of primary units a product is charged.

    Charging units daily is consistently the fairest way to treat customers.
  • MarkyMarkD
    MarkyMarkD Posts: 9,912 Forumite
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    But suppliers don't show a fixed cost and a variable cost any more. The lower tier cost is a combined fixed cost and variable cost, and hence should go up in line with the cost of raw materials to the energy suppliers.
  • KimYeovil
    KimYeovil Posts: 6,156 Forumite
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    Loath as I am to concede a point to Iamesbo, surely he is correct that the tier 1 price should only rise by the same actual amount as the tier 2 price has risen, and not by the same percentage?

    Ignore the unsavoury rest of his post. And I am sceptical of figures from someone who doesn't seem to realise that the number of days left to Christmas changes over time.
  • iamesbo
    iamesbo Posts: 258 Forumite
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    MarkyMarkD wrote: »
    But suppliers don't show a fixed cost and a variable cost any more. The lower tier cost is a combined fixed cost and variable cost, and hence should go up in line with the cost of raw materials to the energy suppliers.

    They may not show a fixed and vaiable cost but in reality that is what their costs are composed of, the higher rate is basically the standing charge which should not fluctuate with gas prices because their fixed costs are not dependant on gas prices.

    What is happening is that the gas companies are using the two rates to overcharge customers. Having two rates achieves nothing other than to confuse the customer, and confusing customers is something nasty companies love, it gives them an oppertunity to steal.
    There should just be the standing charge and then the charge for gas used so that things are transparent, but these companies don't like transparency because transparency means the customer can easilly see when they are being ripped off.

    They love these twin rates though because it means they can increase the standing charge by the same huge amount as they increase the gas price. If people could see their standing charge was going up by say 20% then 30%, in a year, people would know they were being ripped off. Which the twin rates it is not as transparent.
  • Cardew
    Cardew Posts: 29,042 Forumite
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    iamesbo wrote: »
    Having two rates achieves nothing other than to confuse the customer, and confusing customers is something nasty companies love, it gives them an oppertunity to steal.
    There should just be the standing charge and then the charge for gas used so that things are transparent, but these companies don't like transparency because transparency means the customer can easilly see when they are being ripped off.

    They love these twin rates though because it means they can increase the standing charge by the same huge amount as they increase the gas price. If people could see their standing charge was going up by say 20% then 30%, in a year, people would know they were being ripped off. Which the twin rates it is not as transparent.

    You are mellowing - you haven't jailed anyone in the post above and this thread may survive;) A first?

    On a more serious note the introduction of the Tier1/Tier2 charging system, whilst more difficult to understand for some, means that many people gain and nobody loses.

    All of those with very low consumption(particularly gas) can have very low quarterly bills. Quite a lot of people shut off their gas in the summer months and can have a quarter without any charge.

    I am a classic example. I have a little used annex with a separate gas and electricity supply. Before the introduction of the Tier system I paid the full daily charge for both gas and electricity which would be around £200 now I guess.

    Now I can pay virtually nothing for some quarters. Indeed as the dual fuel discount is paid to the electricity account, and exceeds the cost of the few kWhs I use, it actually costs BG for the privilege of supplying me with electricity!
  • iamesbo
    iamesbo Posts: 258 Forumite
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    KimYeovil wrote: »
    Loath as I am to concede a point to Iamesbo, surely he is correct that the tier 1 price should only rise by the same actual amount as the tier 2 price has risen, and not by the same percentage?

    Ignore the unsavoury rest of his post. And I am sceptical of figures from someone who doesn't seem to realise that the number of days left to Christmas changes over time.

    The whole system is made massively complex by using two rates, all companies should use a standing charge and a single rate. The reason why they don't do this is because it would make it easy to compare rates.

    So now you have to use a site such as Uswitch which is paid by the gas companies
    with *your* money, So you are paying not only for your gas but also for the unnecessary the cost of running uswitch. I mean if the rates were transparent it would be obvious who has the lowest cost, and you would not have to pay Anne Robinson to know what should have been transparent in the first place.


    Of course all of that is pretty much a sideshow when the main event is the gas companies rigging their prices to grossly overcharge customers.
    :rudolf::rudolf::xmassign::rudolf::rudolf:
  • iamesbo
    iamesbo Posts: 258 Forumite
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    Cardew wrote: »
    You are mellowing - you haven't jailed anyone in the post above and this thread may survive;) A first?

    On a more serious note the introduction of the Tier1/Tier2 charging system, whilst more difficult to understand for some, means that many people gain and nobody loses.

    All of those with very low consumption(particularly gas) can have very low quarterly bills. Quite a lot of people shut off their gas in the summer months and can have a quarter without any charge.

    I am a classic example. I have a little used annex with a separate gas and electricity supply. Before the introduction of the Tier system I paid the full daily charge for both gas and electricity which would be around £200 now I guess.

    Now I can pay virtually nothing for some quarters. Indeed as the dual fuel discount is paid to the electricity account, and exceeds the cost of the few kWhs I use, it actually costs BG for the privilege of supplying me with electricity!

    No it does not benefit anyone, except perhaps the very well off who have more than one dwelling as you apparently do. The fixed costs for your second supply are still there, but now rather than you paying the cost as you should do, less well off people
    are being overcharged to pay it for you as the gas company will recover all its costs from someone. So we have socialism in reverse, the poor subsidising the rich, much as it has always been.
    No household could use so little gas to not pay any of the second rate for gas, not without freezing to death anyway.
  • Phlik
    Phlik Posts: 1,088 Forumite
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    it's not rocket science though is it? You have so many units at tier 1 per day and the rest at tier 2 for that day. I should think most primary school children could cope with that. Splitting the quarterly tier 1 units equally across the 91 days is the fairest way to do it, could you imagine the complaints if the tarrifs went down mid quarter and everyone realised the tier 1 units had all been charged at the higher price. You can't have it both ways.

    I do find it staggering the amount of people who pay absolutely no attention to how much gas and electricity they use, then bleat about it when it finally catches up with them.

    Phlik
  • KimYeovil
    KimYeovil Posts: 6,156 Forumite
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    iamesbo wrote: »
    The whole system is made massively complex by using two rates, all companies should use a standing charge and a single rate. The reason why they don't do this is because it would make it easy to compare rates.

    So now you have to use a site such as Uswitch which is paid by the gas companies
    with *your* money, So you are paying not only for your gas but also for the unnecessary the cost of running uswitch. I mean if the rates were transparent it would be obvious who has the lowest cost, and you would not have to pay Anne Robinson to know what should have been transparent in the first place.

    Those who are not able to quickly* see that ( (tier 1 - tier 2) * 30 * quarterly/3 ) is their effective monthly charge and all the units cost tier 2 then they probably will not be able to compare the results of the comparison sites anyway.

    But I do agree and have always thought that this 30 day monthly cost should be explicitly included on tables as well as the prices of each tier so that people can immediately see both the likely standing charge and the unit prices. And that they should not be named 'no standing charge' tariffs.

    * Okay, now I wrote out the formula I retract the 'quickly'
  • Cardew
    Cardew Posts: 29,042 Forumite
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    iamesbo wrote: »
    No it does not benefit anyone, except perhaps the very well off who have more than one dwelling as you apparently do. The fixed costs for your second supply are still there, but now rather than you paying the cost as you should do, less well off people
    are being overcharged to pay it for you as the gas company will recover all its costs from someone. So we have socialism in reverse, the poor subsidising the rich, much as it has always been.
    No household could use so little gas to not pay any of the second rate for gas, not without freezing to death anyway.

    Rich?

    With this credit crunch I am having to get rid of the wife's Ferrari and put some of the house staff on part time; my Butler broke the news to them gently.

    Anyway 'socialism in reverse' is a concept I can live with!

    I did explain it was an annex! I also specifically stated it was gas in the summer quarter(s) where some people did not use all the Tier 1.
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