MSE News: Guest Comment: The problem with energy firms

A._Badger

magyar wrote: »

The very existence of MS/Quidco and so on illustrates how much cash is on the table in this industry.

Oh, there is plenty of cash on the table in the energy business:

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8583543/Scottish-Power-chairman-has-pay-package-doubled.html

magyar

A._Badger wrote: »

I agree - but, in fairness, it can be hard to switch, for just the reasons you suggest.

I fully sympathise. Ultimately you can't blame people for not switching when it's hard to do so. And it's naive to expect the utilities to voluntarily make it easier to do so - that's the job of the regulator.

And the irony is that people's anger is always directed at the utilities and not the regulator!

magyar

A._Badger wrote: »

Oh, there is plenty of cash on the table in the energy business:

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8583543/Scottish-Power-chairman-has-pay-package-doubled.html

The funny thing is it does't seem like it from inside the industry (by the way I never hide the fact I work in the industry - but I don't work for one of the supply businesses).

Wages are generally fairly low, working conditions not great and it's quite a 'lowest common denominator' environment with high staff turnover and pretty low worker satisfaction. The problem is not really one of huge profits, it's one of collosal inefficiency.

Part of the problem is its age. It's a very old industry and in reality much of the industry operates exactly as it did under the old nationalised CEGB. By comparison the mobile phone industry has been around for only 20 years or so (and only 10 years in a big way) and so it had the benefit of a clean sheet of paper to work from.

thor

magyar wrote: »

And the irony is that people's anger is always directed at the utilities and not the regulator!

Isn't that like saying people should be more angry at the police rather than the criminal?

magyar

thor wrote: »

Isn't that like saying people should be more angry at the police rather than the criminal?

Look at it this way.

The behaviour I expect of the Chief Executive of a utility is to come to work each morning and say "How can I make as much profit as possible".

The behaviour I expect of the Head of Ofgem is to say "How can I make sure there is as much competition and fairness in the marketplace as possible".

Which of the two do you think is doing their job the best right now? And which one is actually directly employed by the taxpayer to protect their interests?

To compare to your analogy, I think most people think the police do a pretty good job in the circumstances. If we felt the cause of crime was completely ineffectual policing, then people would be right to be angry with them.

backfoot

A._Badger wrote: »

And it sounds to me like you haven't the experience of having lived under these regimes. Which, of course, is precisely what you admitted in an earlier post.

So why don't you just cut the juvenile smilies and post some sort of coherent argument for why you are right, that a centralised, state-controlled energy supply system would solve our problems - and that most of the rest of the rest of the world is wrong for having dismantled them.

It's a rainy weekend. I'm sure we could all do with a laugh.

OK,you seem to be on my case so I will respond.

My first post on the thread explained my reaction to the original article. To summarise I contrasted the current fiasco (generally agreed on this forum and by professional commentators), with the pre-privatisation operation of ESI.

You said that all state monopolies had been inefficient and I challenged you to be specific in relation to the ESI to say where? You failed to come up with any comment other than repeating the oft heard generalisations.

Interetingly,you thanked me for my original post so you must have thought it had some merit.(Withdraw if it now if it embarrasses you).

I didn't say I was too young not to understand the pre privatisation regime. I said jokingly I was too young to recall Flanders etc.For your information I worked in the ESI in various roles over a long period of time both pre and post privatisation.I was also a customer within both periods.

I never ever had a problem with gas or electricity pre privatisation but seem to have endless problems and ever increasing prices post privatisation.

Technology brought about fantastic change during my career and many efficiencies evolved. Now for example I have just ended a brief contract with EDF who have ineptly managed a transition to a new CS and Billing system.The whole episode for many customers has been a shambles.

I will try again and ask you plainly and sensibly to identify what was wrong with the ESI and Gas Board pre privatisation?

Just anything,to make it easy,identify any problems you were aware of.

:D;)

flexrider

Do you think with all these price rises the only way now is to completey go off grid and use other types of scources like solar power panels?

Just a idea but these companies know at the end of the day you need the power to turn your Home items on ect, and i could see alot of people the way how things are doing that over the years.

backfoot

Ben84 wrote: »

I still think privatisation was presented in an irrational way with reasons that are hard, maybe impossible to rationally defend.

Ben84 went on to say lots of pertinent points as well.

Excellent post. :T

Pincher

The nationlised industries were not in-efficient, they simply had all the non-essential elements that made them fit for purpose:

1. Spare engineers so some of them can go on holiday and training courses without anyone having to do over time.

2. Proper maintenance schedules so the Hatfield disaster doesn't happen.

Etc. All of which cost money.

The deterioration of the national infrastructure and cutting back of engineering staff doesn't make it more efficient, it just means we are running on the edge of blackout and wafer thin service levels.

The problem was the unions becoming too powerful, and demanded a bigger slice of the cake than the tax payer could afford. Privatisation was a manoeuvre which got rid of a hot political potato, with a short term bonus of revenue from the sale of shares.
It's a result of bullet dodging and short term thinking.

magyar

I think the point about nationalisation is far simpler than Ben presents it. I don't agree that nationalisation provides cheaper products, after all do you hear anyone calling for Tesco and Sainsbury's to be nationalised? Does anyone seriously think the government could run those stores better and provide cheaper/better food?

However what nationalisation is excellent for is planning and implementation. If you want to see pure deregulation in effect, look to the USA. The world's most technologically-advanced nation has the shonkiest power infrastructure you can imagine - whereas actually we have one of the finest in the world.

A nationalised industry can simply look at the map and say "right, we'll have a power station there, there and there, we'll upgrade the grid here, here and here, and it can all fit together". Trying to get dozens of private companies to do that will never work efficiently (and it doesn't).

So what I think would be sensible is to split out the generation part of these companies and put those into one nationalised company (including the grid). This would then sell wholesale electricity to private supply companies. I think this would give the true competition needed to get low prices whilst ensuring efficient control and growth of the backbone infrastructure.