oil prices below $50 a barrel!! still no price cut!!

reactor_3

PrinceGaz wrote: »

British Gas - Gas 95.7%, Electric 59.8% (starting with Sep 2005 increase)
E.ON - Gas 100.6%, Electric 68.3% (starting with Jul 2005 increase)
EDF - Gas 95.0%, Electric 57.9% (starting with Oct 2005 increase)
nPower - Gas 92.3%, Electric 74.0% (starting with Jan 2006 increase)
Scottish Power - Gas 94.5%, Electric 50.1% (starting with Jul 2005 increase)
Southern - Gas 95.8%, Electric 72.6% (starting with Jan 2006 increase)

That's rather interesting.
Give that electricity costs about 3-4 times the price of gas.
For example using nice easy figures.
If gas costs £1 a unit then electricity costs £4 a unit.
So the cost for electricity = £1 gas and £3 to convert the gas to electricity.
1+3=4.

Now if gas doubles in price gas would cost £2, a 100% increase.
So you would expect electricity to cost...(drum roll)....£2(for gas) + £3 (for overheads)= £5. now thats only a 25% increase from £4.

Yet...we have seen increases from 58% to 73%!!!

Even if it was 1+2 (3) going to 2+2 (4) that would only be a 33% increase.

However looking back at my old bills the ratio of the prices is 4:1 or higher
so we should only have seen a 25% increase in electricity prices, yet we have seen over double that, triple in fact, 2.4 times is the average.

So electricty prices are 2.4 time higher than they should be.

I am surprised the 'regulator' OFGEM did not spot that, but perhaps they were too busy? Out playing golf with the electricity company directors, for example?

Robbers - It's scandalous.

SwanJon

reactor wrote: »

If gas costs £1 a unit then electricity costs £4 a unit.
So the cost for electricity = £1 gas and £3 to convert the gas to electricity.
1+3=4.

Assuming 100% of electricity is genertaed from gas, and none from coal, nuclear, hydro etc. Your electricity supplier will be able to tell you what proportion of 'your' electricity comes from each source.
Also assumes there are no other variable costs (maintainance, wages, inflation etc)

reactor wrote: »

Robbers - It's scandalous.

Now we've discussed using inflamatory words before. Robbers implies violence or threatened violence. Care to point this out in this scenario?

wakeupalarm

Cardew wrote: »

I have some knowledge of US gas/elecric bills, and can confirm that most States have a monopoly.

Another good point is the the first xx kWh are cheaper and then the price increases.

To give an example for an Electric only property in Florida(not Orlando thank goodness!!) I pay a standing charge/taxes of approx $5 a month and 10.15 cents(7p) for the first 1000kWh and over 1000 kWh the price rises to 12.18 cents. (8.3p)

Which begs the question why haven't some of the utility companies here adopted a simliar pricing structure? Increasing the unit cost the more you use rather then the current system where it gets cheaper seems to make sense. Surely, in a competitive market advertising cheaper 1000 units rather then more expensive 1000 units would be easier to implement.

SwanJon

Here we have either a standing charge or the more expensive first block.
Cardew's example has a standing charge, and then cheap and then expensive - would adding another type of tariff help people or confuse them?
We could go further and mimic the mobile phone companies where you pay a bigger standing charge and then have 'included units' too

Cardew

SwanJon wrote: »

Cardew's example has a standing charge, and then cheap and then expensive - would adding another type of tariff help people or confuse them?

Swanjon,
The system I have in the USA is not optional of course - so no confusion exists; you use more than 1,000kWh in a month - you pay extra for each additional kWh!!!

The purpose of course is to encourage people to use less electricity - not a concept many seem familiar with in the USA!!

The difficulty with having a choice of different tariff structures in UK is that we will naturally all pick a structure that suits our consumption pattern.

SwanJon

True, with only one tariff and one supplier choice there can be no confusion (nor any switching incentives).
However if one of the suppliers here tried to introduce it there'd be a call of 'confusion marketing' more than now.
If the current tariffs available are simplified there may be a place for this kind of tariff, won't hold my breath though.

lrr_2

I was just away to start a new thread on this topic but found this one.

Why are prices falling on everything but gas/electricity still sky high? Its never been on the news now for ages and the companies must be loving it seeing the banks getting it in the neck and not them. Time to start the pressure on them again, especially now we are in the winter months now.

Cardew

lrr wrote: »

I was just away to start a new thread on this topic but found this one.

Why are prices falling on everything but gas/electricity still sky high?

If you read through this forum you will find hundreds of posts giving opinions on when, and by how much, prices should drop.

The arguments are also rehearsed in the media on a daily basis.

reactor_3

SwanJon wrote: »

True, with only one tariff and one supplier choice there can be no confusion (nor any switching incentives).
However if one of the suppliers here tried to introduce it there'd be a call of 'confusion marketing' more than now.
If the current tariffs available are simplified there may be a place for this kind of tariff, won't hold my breath though.

How would having just one tariff and one supplier be confusing?
It the least consufusing.

We allready have confusion marketing my supplier has 39 different tariffs!!!

For the the 'big 6' thats 234 different tarifs, not forgetting the smaller operators.


For you to suggest replacing that lot with one tarriff would be confusing, well...you have got some flipping cheek thats all I can say.

mech_2

reactor wrote: »

That's rather interesting.
Give that electricity costs about 3-4 times the price of gas.
For example using nice easy figures.
If gas costs £1 a unit then electricity costs £4 a unit.
So the cost for electricity = £1 gas and £3 to convert the gas to electricity.
1+3=4.

There are a number of flaws in your reasoning.

The most obvious failure of logic lies in the assumption that you can turn one unit of natural gas into one unit of electricity. You can't. Average gas-fired power station efficiency is probably about 50%. Then approximately 7% of the electricity is lost in transmission, so 1 kWh of gas-fired electricity at your meter needs 2.15 units of gas.

Then you have to take into account that the retail price of gas is set at a single level for a sustained period, but wholesale prices vary considerably. The price for gas is based on a predictable consumption curve of central heating use. We can't assume the same curve applies to electricity generated from gas. Especially as gas generated power is one of the methods of generation which can be turned on and off to follow electricity demand. So a direct link between rises in retail gas prices and rises in the wholesale cost of gas used for electricity is not reliable.

Also, only about 40% of our total electricity is generated from gas. The second most common fuel for electricity generation is coal, so without knowing what coal prices did in the same period, we can't draw conclusions.