Energy Price hikes... taking the p***??!!

Cardew

Vedder2008 wrote: »

Sorry I have to disagree with this, my son lives in France and he pays 3 pence where as I pay 13 pence for electricity.

You are not comparing like with like!

If you want to see prices - look at this.

http://energy.eu/#Domestic

Cardew

Vedder2008 wrote: »

Sorry I have to disagree with this, my son lives in France and he pays 3 pence where as I pay 13 pence for electricity.

The latest French Tariffs(14 Aug 2010) for off-peak electricity entail paying an annual Standing charge depending on the kVA rating for your house.

The cheapest is 100 Euros for 6kVA and for 18kVA it is 272 Euros. If you have an all electric house you would need 18kVA.

The prices are then 0.1235 Euros/kWh day and 0.0784 Euros/kWh - approx 10p and 6.5p for a unit(kWh)

davidgmmafan

Very interesting to see an international comparison, I've never seen those figures before and always found it a bit suspicsious that when souding of the newspapers never publish a comparison. Now we know why!

mech_2

Cardew wrote: »

BG declare that their profit margin is 2%. So as the average bill is about £1,200 that makes £24.

I'm not sure where they state that. I've read their full-year results in previous years and in the past 6% profit was the target.

It was widely reported in the media that BG Residential made £585 million in the first 6 months of this year. Divide that between 9 million households (probably a generous representation of their overall market share) and you get £65 per household. If they make no more profit for the rest of the year (not unlikely) that's still a 6% profit margin when we inflate our rule-of-thumb "average" £1000 household energy bill by 8% to £1080 due to the cold January.

Link: http://www.independent.co.uk/news/business/news/big-freeze-gives-british-gas-98-profits-hike-2037247.html

Totally agree that the parent generating companies(Centrica in BG's case) make much higher profits. However as I said above, world energy prices determine their profits.

Nevertheless, the profit exists. I'm not ascribing motives, I'm just aiming for an accurate representation of reality.

In any case they are prohibited from subsidising their distribution arm.

That is a myth. I'm quite sure they do. Otherwise what would be the point in increasing their level of vertical integration?

With Tesco their profit margin is approx 6% - profits last year £3.13 billion on sales of £54.3 billion. This year £3.4 billion on sales of £62.5 billion.

So actually BG's 7.6% profit margin last year was higher.

http://business.timesonline.co.uk/tol/business/industry_sectors/utilities/article7041695.ece

Cardew

mech wrote: »

I'm not sure where they state that. I've read their full-year results in previous years and in the past 6% profit was the target.
On every bill they send out is a breakdown of expenditure and the last I have is Oct 2009 where profit is given as 2%


It was widely reported in the media that BG Residential made £585 million in the first 6 months of this year. Divide that between 9 million households (probably a generous representation of their overall market share) and you get £65 per household. If they make no more profit for the rest of the year (not unlikely) that's still a 6% profit margin when we inflate our rule-of-thumb "average" £1000 household energy bill by 8% to £1080 due to the cold January.

BG made £376 million in 2008 and £595 million in 2009 From the link you gave

"The announcement from Britain’s biggest utility company, which supplies 15.7 million homes," /

Also from the same link their Chairman stated:

“We made £38 per average customer last year after tax . .COLOR]

Link: http://www.independent.co.uk/news/business/news/big-freeze-gives-british-gas-98-profits-hike-2037247.html

Nevertheless, the profit exists. I'm not ascribing motives, I'm just aiming for an accurate representation of reality.

That is a myth. I'm quite sure they do. Otherwise what would be the point in increasing their level of vertical integration?

So actually BG's 7.6% profit margin last year was higher.

http://business.timesonline.co.uk/tol/business/industry_sectors/utilities/article7041695.ece

I agree that the figures do show 7.6% profit earlier this year so the 2% on their bills is not valid it would seem.

Your link states 15.7 million homes - That should be 15.7 million accounts which would tally with £38 profit

However the overall point is surely that in this excellent year BG made £38 per customer. From the screams of protest in this thread and others it appears that people think thatr BG and others could cut their bills by £hundreds.

Poosmate

I suppose looking at it that way, paying "someone" £38 a year to provide a service 24/7 which rarely fails is pretty cheap! Two services if it includes gas as well as electric - Bargain! I pay that to Virgin each month for tv/phone/bb and it regularly malfunctions!

Poo

mech_2

Yes. Though note it's per utility. And it's an average across all households.

I very much doubt my energy provider makes £60 (or more) profit from me seeing as I'm on the very lowest tariff for my area and usage and I use half the energy of the average household. Therefore, to maintain the average, someone somewhere is making up the shortfall. Probably heavy users and/or people on standard tariff.

The same goes for serial switchers, people who disappear without a trace owing a debt to the energy company, etc. I have no idea what proportion of households are actually profitable and which are a liability. I expect the energy companies have some idea of the total costs in these cases, but probably not what number of households are actually profitable.

Then there's still the profit made upstream by gas producers and electricity generators. Much of the time these are the same conglomerates that supply households with final energy.

Then there are the grid operators and gas storage operators who make a profit out of transporting the energy and providing the capacity to balance the gas network at peak demand.

Then there's whoever ultimately makes the profit out of carbon trading and energy efficiency obligations, which is probably another £80ish per household.

It all adds up. Maybe privatisation wasn't such a good idea after all?