EDF promises not to hike prices before March News Discussion

mountainofdebt

I've just done used a comparison website and its given me EDF's online saver as saving me £359.43 not taking into account the £180 bonus if I used Quidco.

However it's also given me a saving of £86 (no bonus though) if I went with its fixed 2015 tariff.

Am I mad to be seriously considering the fixed tariff?

macman

What tariff are you on now?
Are you using your annual kWh consumption figs, not your monthly DD figs?

mountainofdebt

I used the annual useage figures.

Currently on Eon's fixed v3 tariff which is ending on Wednesday.

t0rt0ise

macman wrote: »

No it's not just dual fuel, it's dual fuel or electricity only. No gas only I'm afraid-I had the same problem.

I thought you could only do electricity only with the EDF deal if you were in an all electric property. I thought that if you had gas you couldn't do electric only.

macman

No, you can do electric only, but not gas only. The supply to the property is irrelevant.

macman

mountainofdebt wrote: »

I've just done used a comparison website and its given me EDF's online saver as saving me £359.43 not taking into account the £180 bonus if I used Quidco.

However it's also given me a saving of £86 (no bonus though) if I went with its fixed 2015 tariff.

Am I mad to be seriously considering the fixed tariff?

On my figs (average consumption) I get a figure 19% higher for Fix Onine 2015 vs Online Saver 7: that's £238 more.
The ETC"s are pretty hefty (min £100, max £200 depending on when you leave). However the lock in is only until March 2013.
Essentially you'll be paying 20% more now to buy a insurance against any increase for the next few years.

backfoot

macman wrote: »

On my figs (average consumption) I get a figure 19% higher for Fix Onine 2015 vs Online Saver 7: that's £238 more.
The ETC"s are pretty hefty (min £100, max £200 depending on when you leave). However the lock in is only until March 2013.
Essentially you'll be paying 20% more now to buy a insurance against any increase for the next few years.

This is very useful. however,it's slighly more complex. The differential is 20% now and after the next increase, say 5%, it drops accordingly, and so on.

So given some assumptions/guesses , you could model the premium paid for the fix. The point I was trying to make it is 20%, say until March 2011,then 15% approx,then say 10% the following year.

When I was a student we did calculations of Net Present Value to work out these sort of things but that was a good while back now.

Does that make sense?

macman

Yes, but because any modelling we create is based on sheer data guesswork, the premium could be way out. As it would be were prices to fall 5% next year and then continue to do so-unlikely though that may be.
If you can afford to pay the premium now and want a risk free period for the future, then it's a good deal.
But you can bet that they would not offer such a deal unless they thought that they were going to come out ahead over the life of the contract.

t0rt0ise

macman wrote: »

No, you can do electric only, but not gas only. The supply to the property is irrelevant.

LOL.. another confusing rule of EDF's...

"The Online Saver Version 7 tariff is available to Dual Fuel and Electricity only customers.."

Hmmm. Calling people customers before they've even signed up is awkward and distorts the meaning. Hopeless!

backfoot

macman wrote: »

Yes, but because any modelling we create is based on sheer data guesswork, the premium could be way out. As it would be were prices to fall 5% next year and then continue to do so-unlikely though that may be.
If you can afford to pay the premium now and want a risk free period for the future, then it's a good deal.
But you can bet that they would not offer such a deal unless they thought that they were going to come out ahead over the life of the contract.

I don't disagree with any of that.All I was trying to add was that in a market of rising prices, the hedge is actually more than the just the starting differential.

If we assume prices rise at 5% per year. It goes something like this:

YEAR Variable Fixed Difference
1 1000 1200 200
2 1050 1200 150
3 1103 1200 97
4 1158 1200 42
5 1216 1200 -16

So depending on the assumption,in this case 5%, you see that it is only at the end of Year 5 does the fixed rate actually save you anything and its not very much then.

By that stage you have paid 20% plus the premium over the next three years.

The point I was trying to get across is that the 20% premium is only part of the total premium you are paying. :eek: 20% sounds ok (ish) but its likely to be a lot more. By this time the 5 year fix is at an end.

p.s table doesn't line up but it should make sense.