EON five year fix

Pincher

To the EON rep,

Ofgem warned us about the 25% hike in energy prices
over the next five years, so there are people primed and eager
to fix for five years.

What are you waiting for?

Do you want British Gas to come up with a five year fix first?
The exit penalty on a five year fix will be humongous,
so British Gas will have them captive for five years.
If you launch too late, you won't see these customers for Five Years.
Stop fooling around with tiny little tariff tweaks,
grab a million new customers who will STAY WITH YOU FOR FIVE YEARS,
because they don't want to lose the fix in case the 25% hike comes.

I don't need a reward for giving you sound business advice, just give me my five year fix!

P L E A S E.

Cardew

I think ofgem said 25% over the next 10 years, not five.

The $64,000 question is what premium would you be prepared to pay for a 5 year fix?

When BG introduced their 4.5 year fix in Late 2005(sadly running out at the end of April) there was a 2.8% premium over standard rates for gas and a reduction of 4.8% for electricity, making it cost neutral for anyone with average consumption.

Pincher

Cardew wrote: »

I think ofgem said 25% over the next 10 years, not five.

The $64,000 question is what premium would you be prepared to pay for a 5 year fix?

When BG introduced their 4.5 year fix in Late 2005(sadly running out at the end of April) there was a 2.8% premium over standard rates for gas and a reduction of 4.8% for electricity, making it cost neutral for anyone with average consumption.

Strange, I distinctly remember hearing 25% over five years on the TV, but now it's 25% in ten years on the web. You are right, no hurry to fix.

Loading a premium is if there are no commodity futures to base your price on. If the futures contracts are cheap right now, then EON just has to add a profit margin, and an early exit penalty to stop people jumping to a better deal. Unfortuantely I don't think the energy futures go beyond two years. If they want to, EON can sign a fixed price deal for five years with BP, the Russians, etc. which has the same effect. We as individuals do not have the option, so we rely on the domestic suppliers to do it on an industrial scale, and then pass it on to us, at a profit.

To guard against buying too much, I would suggest EON create tranches of limited availability, just like the FixOnline tariff right now. The price EON can negotiate obviously varies according to long term energy price expectation, so each tranche will be priced slightly differently, just like the v4, v5 and v6 that we have seen.

Plushchris

Just one question, why E-on?

Pincher

Plushchris wrote: »

Just one question, why E-on?

Because I have a phobia against British Gas.
I left BG because they:

1. Wouldn't cover my then boiler, because it was "too old", despite the fact that my CORGI guy has kept it in tip top shape for the subsequent fifteen years.

2. Put me on a Barclaycard payment scheme, then failed to collect any payment for a year, despite my chasing every quarter, because they had trouble linking with the Barclaycard IT system, which they couldn't get working a year after launching the scheme.

3. Poor customer service, impossible to get through on the phone to tell them they hadn't collected payment for a year.

4. Attempted to sell me things I didn't need, and sending alarming letters to try to frighten the unweary.

5. More expensive.

EON doesn't send me flowers every year, but I have no trouble from them. They don't even try to sell me things. The only things I got were free lightbulbs and a free shower diffuser, which I actually signed up for.

Is there an energy supplier you want to recommend?

Plushchris

I dont think I would "recommend" any of them to be honest.

Just wondered why you directed the post at E-on in particular thats all.

Pincher

http://www.guardian.co.uk/business/2010/feb/03/ofgem-uk-energy-supplies

Five Years, if energy prices left to free market.
I knew I heard five years.

The ten years is relating to infrastructure shortage.

Cardew

Pincher wrote: »

http://www.guardian.co.uk/business/2010/feb/03/ofgem-uk-energy-supplies

Five Years, if energy prices left to free market.
I knew I heard five years.

The ten years is relating to infrastructure shortage.

I knew I had heard 10 years; well 9 years 11months;):

http://www.moneysavingexpert.com/news/utilities/2010/02/warning-over-long-term-energy-costs

It has predicted average household bills could jump during the decade as much as 25% - to nearly £2,000 - without radical moves

Pincher

Well, nobody will give me a ten year fix anyway.
A five year fix is possible, as we know, so I am not asking for the impossible.

E.ON_Company_Representative

Hi Pincher,

Thanks for your thoughts and comments about a five year fixed tariff, as you know at present this isn’t something we have available.

I’ll pass your ideas and feedback on to the people who develop our pricing structures and tariffs.

Brian