MSE News: British Gas boss defends energy price rises

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Former_MSE_Guy
Former_MSE_Guy Posts: 1,650 Forumite
I've been Money Tipped! Newshound! Chutzpah Haggler
This is the discussion thread for the following MSE News Story:

"MD Phil Bentley insists firms are simply responding to rising costs and cannot sell gas and electricity at a loss ..."
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  • HalloweenJack
    HalloweenJack Posts: 632 Forumite
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    edited 21 June 2011 at 11:06AM
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    quick to raise prices when they go up - but slow or never lower them when they go down (like last year)

    he`s talking utter !!!! as usual.
    Sometimes you will see a chart and it shows wholesale prices fell 30% and people complain because prices only fell by 10%. At that point, transportation and green costs would have gone up more. It does not work dollar for dollar

    utter crap - transportation costs are qorked out via contract for a fixed term and not changed when the wind blows.

    the energy cartels are trying to justify why they make so much money - when its coming down to heating or food.
  • WestonDave
    WestonDave Posts: 5,154 Forumite
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    What stands out for me on those graphics is the operating costs and also the environmental costs on the electricity. I guess there is an argument for someone having to pay for making our energy supply sustainable (and in the longer term presumably more insulated from rises) but whether effectively charging 1/3rd of the actual energy cost is a reasonable level is hugely questionable.

    The other part that gets me is the operating costs. If costs of the actual energy and the infrastructure to deliver it are covered elsewhere, what on earth does this cover. You can understand that maintaining gas pipelines and electricity networks is expensive in terms of materials and manpower - so how on earth does it cost half that amount for what effectively amounts to the sales, accounts and customer service functions - most of which should be automated. You have to wonder whether if they cut back the amount they spend on marketing etc, whether they'd be able to cut costs by a worthwhile amount. Trouble is - British Gas has poor online and automated systems - I'm in the process of moving supply from them to EDF - so I get an email saying "We've been informed you are moving house - when you get to your new house...." That has purely come from their internal systems - I've even spoken to a retention agent before that so they knew exactly what was happening and why (no fixed tariff). This costs money and whilst they are all this poor its the customer that is paying to keep useless people in jobs - their staffing levels are still a hangover from the time when in one shape or another they were all public monopolies.
    Adventure before Dementia!
  • 2010
    2010 Posts: 5,371 Forumite
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    When energy firms make millions of pounds profits every year from products that are vital to modern day living, then there is no justification for above inflation price increases.

    No doubt Bentley has to defend this practice because very shortly he`ll be the one racking prices up many times above inflation. :mad:
  • ihateyes
    ihateyes Posts: 1,326 Forumite
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    While i agree prices go up quicker than they come down (same as in Oil)......

    I do think some energy companies are jumped on rather quick...

    I emailled the BBC last year, when the reported British Gas residential making over £585 million profit..... with 15million customers..... now do the maths and it worked out around £38 profit per customer.....

    Now we all pay £xx for gas/£xx for electric... so where does the rest go.... just like oil... the government.

    The crazy thing is gas/elec prices is linked to the price of Oil. !!!!!!!

    Now think about how much you spend on groceries, and look at the profits the supermarkets make.....

    Never a freggin eye blinked!!

    The government has to be pressed on the cost of energy not the companies..... plus there are other european countrie there that pay MORE than us brits.

    Chris Huhne recently said consumers dont need to take the price lying down.... move companies!!! What does this achieve...

    All the companies increase/decrease at the same time.... so not much in way of competition.....
    Also when SP put their price up they will project an amount of customers to spit the dummy and leave, but they will then project that when the others increase, they will get new customers that way...

    Just a freggin merry go round.... i emailled him and told him my thoughts.
    Promo codes are never always cheaper..... isnt that right EuropCar?
  • eurmalian
    eurmalian Posts: 288 Forumite
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    WestonDave wrote: »
    so how on earth does it cost half that amount for what effectively amounts to the sales, accounts and customer service functions - most of which should be automated.

    I'd check on how many people the energy companies actually have working for them, in terms of customer services, office staff, engineers, sales people, meter readers (often actually separate companies, but still need to be paid for by the energy companies). I'd immagine it's an awful lot of people. I don't know if there are numbers online anywhere, but I'd be interested in seeing it...
    I am an employee of British Gas, however the views expressed on this post are mine and do not necessarily reflect the views of Centrica, its subsidiaries or affiliated companies.
  • grahamc2003
    grahamc2003 Posts: 1,771 Forumite
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    WestonDave wrote: »
    What stands out for me on those graphics is the operating costs and also the environmental costs on the electricity. I guess there is an argument for someone having to pay for making our energy supply sustainable (and in the longer term presumably more insulated from rises) but whether effectively charging 1/3rd of the actual energy cost is a reasonable level is hugely questionable.

    /QUOTE]


    In a way, the environmental levy in our bills is the elephant in the room. People seem to want windmills and other so called 'green' generation everywhere - yet their inefficiency is explicit with their subsidiess being something like 37% of the total energy costs in our electricity bills.

    As to the profits - well without them there would be no companies, so we can hardly object to a certain level of profit. And when the 'green' subsidies loaded onto our bills are 2.6 times the profit anyhow, I'm not sure attacking the profit (as others have done) is a priority anyway.

    If people were genuinely presented with a choice such as 'you can have windmills and the like if you are prepared to pay 37% extra on your wholesale electricity cost' would they have chosen them?.

    The nature and implementation of the subsidies loaded onto our electricity bills means they will rise quite substatially over the next few years, and this alone will, imo, guarantee bills rising quite a bit ahead of inflation overthe coming years (continuing the recent trend).
  • short_bird
    short_bird Posts: 3,697 Forumite
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    "The Government can do more. Take the winter fuel payment [which gives £250 or £400 a year for those over 60]. We think that should be targeted on low incomes. The Department for Work and Pensions has got all the data that says which individuals are getting which support. They should target the winter fuel payment and give that money to them and not to those who don't need it. Also, it is given just before Christmas so it goes on presents. It should go to the energy firms and we'll take that money off the bill."

    :eek::eek:

    Not a good idea.
    Cancel the kitchen scraps for lepers and orphans, no more merciful beheadings, and call off Christmas.
  • eurmalian
    eurmalian Posts: 288 Forumite
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    short_bird wrote: »
    Not a good idea.

    Why not? That's what the money is for, after all.
    I am an employee of British Gas, however the views expressed on this post are mine and do not necessarily reflect the views of Centrica, its subsidiaries or affiliated companies.
  • Totality
    Totality Posts: 1,909 Forumite
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    short_bird wrote: »
    "The Government can do more. Take the winter fuel payment [which gives £250 or £400 a year for those over 60]. We think that should be targeted on low incomes. The Department for Work and Pensions has got all the data that says which individuals are getting which support. They should target the winter fuel payment and give that money to them and not to those who don't need it. Also, it is given just before Christmas so it goes on presents. It should go to the energy firms and we'll take that money off the bill."

    :eek::eek:

    Not a good idea.

    It is a good idea. It's exactly what should happen as it prevents people using the money for other things, which isn't the purpose.
  • bikeman
    bikeman Posts: 318 Forumite
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    According to my Scottish Power gas bill their breakdown of costs is:

    Wholesale energy cost 55%
    Delivery 18%
    Accounts and admin 18%
    VAT and govt obligations 9%

    I'd say that means a fair chunk is overheads not energy costs and in this day of online billing and call centres in India it's surprising that these are so high.
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