EDF promises not to hike prices before March News Discussion

Pincher

Good grief, are you me, but when I'm sleep walking?

https://forums.moneysavingexpert.com/discussion/2280323

"As for the EDF deal, it seems to be priced at 7% above standard tariff, but nobody here would be on that. Let us say we are on the cheapest online tariff and paying £900 a year, and the EDF five year fix is £1,200 a year. Assume prices are increasing 8% linearly, which is roughly £80 a year. In year one,we are overpaying £300, year two £220, year three £140, year four £60, it's only in year five that we win by £20!

So all we are doing is to pay the high prices that won't be here for another five years. In total, we will be overpaying £700 over the five years. AND we get penalised for switching away."


So what do you use for risk free interest rate when you do discounting for the next five years? 5% is distinctly unrealistic.

backfoot

Pincher wrote: »

Good grief, are you me, but when I'm sleep walking?

So what do you use for risk free interest rate when you do discounting for the next five years? 5% is distinctly unrealistic.

I wasn't using the site around that time and there is no plagiarism, honest. It's distinctly spooky though I agree.:eek: At least we have drawn the same conclusions and it is a warning to others not to be taken in by the aptly named 'fix'.

My figures were for ease of use at 5% and because it was easy for me to work out.

Having said that, I dunno it doesn't sound so daft. If by some unholy intervention by Ofgem that there was some pegging of these above inflation and above wholesale price increases, 5 % may even be too high. But then again, pigs might ....

What do you think? 7%?

Pincher

Getting plagiarised would at least show people pay attention.
I thought people just ignore what I say.

I don't mean tariff rate increase, for which I used 8%, to illustrate worst case increase scenario. At 5%, the fix is more expensive all the way, in my example. How do I think it will actually play out? 15% total increase over the next four years.

I meant the "risk free interest rate" used for discounting future cashflows into NPV (Net Present Value). Text books tend to use 5% for academic exercises, but in these days of BOE=0.5%, I thought 3% is more realistic. Just idle chitchat, since you mentioned NPV earlier in the thread.

backfoot

Yes NPV's. I would think you are about right. Depends on what you are NPV ing I recall. If its an investment decision the cost of capital (i.e how much it costs to borrow). Then for future cash flows, the alternative may be the inflation rate to find out the true current cost of an income or expenditure flow.

It's a good while since I did one in practice. :eek: I am danger of using my past knowledge here,so I have to be careful.

On Fixed vs Variable, I do believe, the Energy marketing can easily take people in.Our examples, show how and unless there is very high price instability, I think customers should really think hard before being persuaded it is a good idea.

Sisyphean_Task

I joined EDF online on 22nd Nov and received email notification of joining them (without a reference number etc)

I informed British Gas that I was leaving and had their price rise blocked. British Gas have since sent me a letter that says to avoid the price rise my new supplier must contact them within 15 days.

I haven't received anything else from EDF yet so phoned them today to make sure they were contacting British Gas within the required 15 days. They have no record of my internet order and don't know if it is lost in hyperspace or will appear.

Has anyone who joined EDF online around 22nd Nov received anything in the post yet?

cbrpaul

Sisyphean_Task wrote: »

I joined EDF online on 22nd Nov and received email notification of joining them (without a reference number etc)

I informed British Gas that I was leaving and had their price rise blocked. British Gas have since sent me a letter that says to avoid the price rise my new supplier must contact them within 15 days.

I haven't received anything else from EDF yet so phoned them today to make sure they were contacting British Gas within the required 15 days. They have no record of my internet order and don't know if it is lost in hyperspace or will appear.

Has anyone who joined EDF online around 22nd Nov received anything in the post yet?

I joined december 1st,

A: Quidco never tracked, this is the first time i had this happen in years of using quidco !!

B: Email confirmation received , no ref or contract number supplied.

C:Called EDF direct , they have no record of my application


Im not overly confident with confidence with EDF as yet !!!

TwittersPVFC

I registered online with EDF on November 16th, had an email through straight away and Quidco showed as tracking it. Since had a letter through confirming all my details and direct debit dates etc although they hadn't contacted British Gas as of November 25th. Think my letter arrived around the same time.

davecampbell

I registered online with EDF Nov 26th and received confirmation in the post this morning.

Dave

Sisyphean_Task

Still not received my EDF welcome pack.

I phoned EDF and explained that if they do not contact British Gas within 15 days on my behalf I could have to pay the 7% price rise that starts tomorrow 10th December. The person I spoke to at EDF gave me their name and told me to take meter readings on the 10th and then again on the day I actually switch to EDF. Then calculate how much extra I have had to pay, phone them when I switch and they will add a credit to my account to cover the British Gas price increase because EDF should have notified them within the 15 days.

Seems fair enough.