MSE News: Government to announce energy crackdown

Butterfly_Brain

Huhne hasn't got a clue.
I listened to his speech and basically it said to me that there wasn't a lot that he could do about the price hikes what a load of hot air, mmmm now if we got all the politicians spouting their carp it could heat quite a few homes this winter.

TIME TO RENATIONALISE!

daveyjp

Easy solution which doesn't mean total renationalisation - HM Govt set up a public utilities company and add this to the competition. If they can provide a service at 50% of the cost of the others we'll all go there and the competition will disappear, but we all know they can't.

There are dozens of companies selling petrol, but they all charge a similar price - no surpirse when they are all buying the raw material from the same suppliers, just like utility companies.

magyar

green1970 wrote: »

Still sounds very 'toothless' to me, we should all get together, focus on the worst of these companies and give them the shock of their lives by all moving away at the same time unless they stop the price fixing. All these companies could have reduced their prices this year and yet still make an obscene profit - they're pretty much printing money at our expense. Why would they stop unless we force them to?

Can you give me an example of these 'extreme profits'? And how much profit would say is 'fair'? And if profits are the problem, why is not-for-profit Ebico usually more expensive?

Cardew

green1970 wrote: »

All these companies could have reduced their prices this year and yet still make an obscene profit - they're pretty much printing money at our expense.

A question!

If BG and any others of the Big 6 were forced to reduce their prices such that they made zero profit(i.e. just broke even) how much do you suggest the UK average gas/electricity bill of approx £1300pa would reduce.

A clue for you. BG made approx £48 per customer per year in their record year in 2010. Before it was under £30 pa.

A further question:

British Gas, by far the biggest Utility company in UK, had a record year with profits up 24% to £742 million.

Tesco's results were disappointing this year and their share price dropped. They only made £3,800 million profit(£3.8 billion).

Whose profits are the most 'obscene'? and why?

backfoot

Cardew wrote: »

A question!

If BG and any others of the Big 6 were forced to reduce their prices such that they made zero profit(i.e. just broke even) how much do you suggest the UK average gas/electricity bill of approx £1300pa would reduce.

A clue for you. BG made approx £48 per customer per year in their record year in 2010. Before it was under £30 pa.

A further question:

British Gas, by far the biggest Utility company in UK, had a record year with profits up 24% to £742 million.

Tesco's results were disappointing this year and their share price dropped. They only made £3,800 million profit(£3.8 billion).

Whose profits are the most 'obscene'? and why?

Obscenity isn't an accounting convention that I was ever taught. There isn't a measure for it.

What I was taught, was that without detailed analysis and knowledge,accounting and business, that many interpretations of basic data could be formed.

There are many measures of financial results. Some balance sheet based,some profit and loss based,others a combination of the two.Then there are cash flows.

Perhaps you have better knowledge of all of these factors than me and have concluded certain things.

For some reason you didn't give the profit per customer for Tesco or explain whether we are comparing Group Profit for Tesco with just the Supply Business of an Energy Supplier.(always a low margin business from its inception at privatisation.)

I was also taught that it is nearly always a dangerous comparison to cross market sectors from both an accounting viewpoint and investor expectations.

Admittedly, I don't have all the answers. Do you?;)

Consumerist

I got to this thread via the Top Ten Energy 'need to knows' article. Is anyone running this site?

Some online tariffs could still rise. Online tariffs are by far the cheapest. Most have seen their prices hiked, but beware as some deals such as EDF's Online Saver 7, 9, 10 & 12 for example haven't yet, so if they come out your cheapest, be careful switching to them as prices could rise.

I would also add that you need to be cautious about such tariffs as the NPower Sign Online 23 which is a variable tariff which pays about £100 of discounts after you have been on the tariff for a year. If prices rise before the end of your contract [Edit: and you want to switch] then, although you may not have to pay termination fees, you will lose all those "discounts" which made the tariff look attractive on comparison sites.

Pincher

Cardew wrote: »

A clue for you. BG made approx £48 per customer per year in their record year in 2010. Before it was under £30 pa.

According to Moneysupermarket, based on medium usage, I am paying £188 a year less than my supplier's standard tariff, which is in line with Martin's and Chris Huhne's £200 switch difference. Chris Huhne contends that 3/4 of customers are lazy, and therefore are on standard tariff. Let us further assume 1/4 are paying £188 less than standard tariff.



To simplify, there are 4 customers, three are paying £1,188, and one is paying £1,000.


So the total revenue is £4,564.

£48 profit per customer means total net profit is £192.

So the total cost of energy and overheads is £4,564 - £192 = £4,372

Assume all users use the same amount of energy, the cost to supply one user is £4,372 / 4 = £1,093


So, the supplier is making £1,188 - £1,093 = £95 profit for every "lazy" customer, but is LOSING £1,093 - £1,000 = £93 for every "switched-on" customer.


Assuming EVERY customer became switch aware, doesn't that mean the supplier will be losing £93 for EVERY customer?

The logical conclusion is that loss-leader pricing will disappar, and everyone will be forced to pay a price above £1,093, and I will be crying:"Where's my £1,000 tariff gone!"


What Chris Huhne is saying is like: if everyone went to university and became lawyers, doctors and accountants, we would all be living in five bedroom detached houses, with a double garage.


De ja vu Darth Sidius Tony Blair, and Darth Maul Chris Huhne?

mattcanary

Cardew wrote: »

A question!

If BG and any others of the Big 6 were forced to reduce their prices such that they made zero profit(i.e. just broke even) how much do you suggest the UK average gas/electricity bill of approx £1300pa would reduce.

A clue for you. BG made approx £48 per customer per year in their record year in 2010. Before it was under £30 pa.

A further question:

British Gas, by far the biggest Utility company in UK, had a record year with profits up 24% to £742 million.

Tesco's results were disappointing this year and their share price dropped. They only made £3,800 million profit(£3.8 billion).

Whose profits are the most 'obscene'? and why?

Hardly surprising Tesco's profits were down - they have opened so many Tesco locals recently. The cost of this must have reduced their profits considerably.

Anyway, since when is £3.8million in profits small??!!!
It is when a company starts making a loss that they need to seriously worry - not a reduction in the level of their profits to a still considerable amount!

shinkyshonky

just more rhetoric...in other words "sound bite but no substance" politics

magyar

mattcanary wrote: »

Hardly surprising Tesco's profits were down - they have opened so many Tesco locals recently. The cost of this must have reduced their profits considerably.

Anyway, since when is £3.8million in profits small??!!!
It is when a company starts making a loss that they need to seriously worry - not a reduction in the level of their profits to a still considerable amount!

£3.8m in profits is brilliant if your turnover is say £38m and it's 10%. It's pretty good if your turnover is £76m and thus 5%. But if you have 10 million customers and thus a turnover of £12bn it's lost in the noise.