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MSE News: Npower to hike energy prices in January
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Former_MSE_Guy
Posts: 1,650 Forumite



in Energy
This is the discussion thread for the following MSE News Story:
"It will become the fourth firm to announce a winter energy price rise later today in a further blow to households ..."
"It will become the fourth firm to announce a winter energy price rise later today in a further blow to households ..."
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Comments
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I accept that the energy companies are allowed to put their prices up and I don't really get cross with them when they do so. However, given that it (in my view) inexplicably takes weeks to change your supplier, I feel they should have to give us an equivalent amount of notice on price changes e.g. if it takes 8 weeks to change, they should have to give a minimum of 8 weeks notice.0
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Regarding this statement:
"What's frustrating is many millions are unnecessarily paying £100s extra a year. Most are still on standard tariffs which cost an average £1,200 while the cheapest online billed deals are around £900. Most people can compare, switch, get a cheaper price, and save even if their online tariff is subject to a price hike."
Assuming:
1. Everyone uses the same amount of gas and electricity,
2. A utility company has 4 million customers.
3. 2 million customers are on online tariffs and pay £900 per year, and the other 2 million are on standard tariff and pay £1,200.
4. The energy used per customer costs £800 to buy from the wholesale market.
The utility company therefore makes £100 each from the online customers, and £300 each from the standard tariff cutomer.
Total gross profit = £100x2,000,000 + £300x2,000,000 = £800million
If ALL the standard tariff customers switched over to online tariffs,
Total gross profit = £100x4,000,000 = £400million
This will cut gross profit by £400million pounds, so the online tariff will have to rise to £1,000 per year in order to restore the gross profit.
The analogy is economy prices are cross subsidised by business class plane tickets. And so, it is not in the interest of bargain hunters to spread the word, for fear of losing the good deals.
Just an observation. Well, by merely observing, we are changing the system, quantum mechanics.0 -
I accept that the energy companies are allowed to put their prices up and I don't really get cross with them when they do so. However, given that it (in my view) inexplicably takes weeks to change your supplier, I feel they should have to give us an equivalent amount of notice on price changes e.g. if it takes 8 weeks to change, they should have to give a minimum of 8 weeks notice.
If you contact your supplier within 10 days of being notified of the change, they have to by law freeze your prices at their old rate for a number weeks in order to give you time to switch supplier. I'm unsure of the exact time frame but its at least 6 weeks.
As of mid January next year suppliers will need to give 30 days notice of any price change. So still not enough time to actually perform a switch but you will still be able to freeze your prices as described above.0 -
Hardly a surprise given the others have done so surely? I expect the rest will probably follow too, greedy as they may be!0
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Regarding this statement:
"What's frustrating is many millions are unnecessarily paying £100s extra a year. Most are still on standard tariffs which cost an average £1,200 while the cheapest online billed deals are around £900. Most people can compare, switch, get a cheaper price, and save even if their online tariff is subject to a price hike."
Assuming:
1. Everyone uses the same amount of gas and electricity,
2. A utility company has 4 million customers.
3. 2 million customers are on online tariffs and pay £900 per year, and the other 2 million are on standard tariff and pay £1,200.
4. The energy used per customer costs £800 to buy from the wholesale market.
The utility company therefore makes £100 each from the online customers, and £300 each from the standard tariff cutomer.
Total gross profit = £100x2,000,000 + £300x2,000,000 = £800million
If ALL the standard tariff customers switched over to online tariffs,
Total gross profit = £100x4,000,000 = £400million
This will cut gross profit by £400million pounds, so the online tariff will have to rise to £1,000 per year in order to restore the gross profit.
The analogy is economy prices are cross subsidised by business class plane tickets. And so, it is not in the interest of bargain hunters to spread the word, for fear of losing the good deals.
Just an observation. Well, by merely observing, we are changing the system, quantum mechanics.
Nice analysis. :T
In this case the message is being spread by people who want your second scenario, because each change brings them kick back.
Also I am sure we wouldn't as 'switch savvy' keep all the secrets to ourselves, would we ?:shhh:
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If you contact your supplier within 10 days of being notified of the change, they have to by law freeze your prices at their old rate for a number weeks in order to give you time to switch supplier. I'm unsure of the exact time frame but its at least 6 weeks.
As of mid January next year suppliers will need to give 30 days notice of any price change. So still not enough time to actually perform a switch but you will still be able to freeze your prices as described above.
Thank you for that, I'll be on the phone to them asap.0 -
One puts them up they all put them up, that`s what they call competition!
I`m with BG who have increased, from today, by 7% BUT they have also increased the amount of units you have to use in tier 1 electricity before you come on to tier 2, from 125 kwh to 180 kwh per quarter.
This really amounts to an extra hidden increase besides the initial 7%.0 -
Regarding this statement:
"What's frustrating is many millions are unnecessarily paying £100s extra a year. Most are still on standard tariffs which cost an average £1,200 while the cheapest online billed deals are around £900. Most people can compare, switch, get a cheaper price, and save even if their online tariff is subject to a price hike."
Assuming:
1. Everyone uses the same amount of gas and electricity,
2. A utility company has 4 million customers.
3. 2 million customers are on online tariffs and pay £900 per year, and the other 2 million are on standard tariff and pay £1,200.
4. The energy used per customer costs £800 to buy from the wholesale market.
The utility company therefore makes £100 each from the online customers, and £300 each from the standard tariff cutomer.
Total gross profit = £100x2,000,000 + £300x2,000,000 = £800million
If ALL the standard tariff customers switched over to online tariffs,
Total gross profit = £100x4,000,000 = £400million
This will cut gross profit by £400million pounds, so the online tariff will have to rise to £1,000 per year in order to restore the gross profit.
The analogy is economy prices are cross subsidised by business class plane tickets. And so, it is not in the interest of bargain hunters to spread the word, for fear of losing the good deals.
Just an observation. Well, by merely observing, we are changing the system, quantum mechanics.
Summed up perfectly. The very fact that so many people are still paying the standard rate with their supplier (this could be through sheer apathy or maybe they are one of the approx 8 million households who don't have net access) cross subsidises the headline-grabbing online only deals. It's not as if the energy company (no matter who it is) actually WANTS their existing customers to change from standard to online only, they only may be interested if the punter tells them they are switching away, THEN the online deal will normally be mentioned.
Why do people think the door knockers only ever mention standard rates to their prospective customers? They make the assumption that the vast majority of punters who answer the door aren't savvy, and the online deals are designed to attract the savvy punter only.
PS I would hazard a guess that there are still more punters on standard deals than online only deals in the UK.0 -
A small correction.
Article should say (I think) Scottish and Southern put up GAS prices by 9.4% on 1st December not ELECTRICITY prices.I came, I saw, I melted0 -
One puts them up they all put them up, that`s what they call competition!
I`m with BG who have increased, from today, by 7% BUT they have also increased the amount of units you have to use in tier 1 electricity before you come on to tier 2, from 125 kwh to 180 kwh per quarter.
This really amounts to an extra hidden increase besides the initial 7%.
I think BG reduced the actual cost of tier 1 and increased the threshold.His Heart Proved He Was A RedSuarez, SuarezWe Bought The Lad From AmsterdamWe Know He's Not a Chelsea Fan.Fernando Torres = El Judas0
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