MSE News: Government electricity plans 'provide price hike insurance' 12 July 2011 at 7:53PM in Energy 13 replies 1.7K views

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"The Energy Secretary insists reforms will protect consumers against the steep price rises seen in recent days ..."

Read the full story:

Government electricity plans 'provide price hike insurance'

backfoot

Misleading headline

Consumerist

. . . and what guarantee do we have that it won't be "All Change" after the next general election.

Butterfly_Brain

Another hit on the poorest in society :mad:

J_i_m

Obviously it was too much expect the energy & oil companies to invest some of their extortionate profit into investing into future power supply.... nope push it on to the already struggling consumer as always.

Joe_Bloggs

Is this some kind of energy derivative announcement ? What guarantees/safeguards are available for the unwitting consumers who are going to pay for it ?

J_B.

magyar

Consumerist wrote: »

. . . and what guarantee do we have that it won't be "All Change" after the next general election.

No government can legally bind a future government, so what they do in circumstances like this is to set up a company which would enter into contracts (which would be legally binding) with energy suppliers and generators.

magyar

Joe_Bloggs wrote: »

Is this some kind of energy derivative announcement ? What guarantees/safeguards are available for the unwitting consumers who are going to pay for it ?

J_B.

There are few safeguards, which is why as I system I don't like it. There is ample opportunity for a company which owned a nuclear station and a gas station to simply run the nuke when power prices were low (and thus get topped up) and run the gas station when prices were high, which - since gas stations aren't in the CFD - would not result in payment back.

The system is good for attracting investment in new stations and if you're after several nuclear stations costing £50bn, you need that.

So I can see the benefits, but I fear that there will be gaming of the system which as you say the customer will be paying for.

magyar

J_i_m wrote: »

Obviously it was too much expect the energy & oil companies to invest some of their extortionate profit into investing into future power supply.... nope push it on to the already struggling consumer as always.

Duh! The energy and oil companies DO pay for the investments.

Pincher

High upfront costs?

No one wants to take on the risk and responsibility of major projects, which is what running a business in a capitalist system is supposed to be. You raise capital, by borrowing or putting up your own money, you build it, and the profit or loss is yours.

Tony Blair has created a welfare state for businesses.
Private Public Initiatives are money pits.
The government, i.e. tax payers, take on all the risk,
and the private company is virtually guaranteed long term profit.

Why would any company build a power station out of their own pocket, when they just have to hang around long enough, and the government will come up with yet another handout, which always come out of our pockets.

What we should do is wait till America nearly defaults,
hoover up on US Treasury bills, and then demand Alaska in payment.
BP already has a base in Perdue, so we just have to change the flag to the Union Jack. The inhabitants already speak English, so it's a ready made colony.

Joe_Bloggs

I wish to thank magyar for their informed comments.
I am worried that the public is being milked by systematic market behaviour that rewards corporate speculators who dabble in the seasonal energy market. Could this this 'dabbling' ultimately increase the price of energy as seen by the consumer ?
J_B.