Energy and competition

pqrdef

People are agitating for simplified energy tariffs.

But if we're able to compare prices, we'll all flock to the cheapest supplier. Then the others will have to match prices or go out of business.

But when they're all charging the same, the regulator will moan about cosy cartels and accuse the suppliers to failing to compete and complain that consumers aren't being offered enough choice.

So what do we really want?

wotsthat

To be honest just more people checking that they, and their elderly relatives, aren't on a punitive tariff would be a start. We are a long long way from a situation where people will be flocking to the cheapest deal. Apathy rules in the energy market.

grimsalve

pqrdef wrote: »

So what do we really want?

Value for money

I'd prefer a flat rate tariff structure just so we could compare suppliers like for like.

pqrdef

wotsthat wrote: »

We are a long long way from a situation where people will be flocking to the cheapest deal. Apathy rules in the energy market.

So one supplier sets its stall out to be the cheapest, and the rest charge more and rely on apathy to keep going. Is this a healthy market?

wotsthat

pqrdef wrote: »

So one supplier sets its stall out to be the cheapest, and the rest charge more and rely on apathy to keep going. Is this a healthy market?

It isn't healthy.

That's why I said an increase in the number of households checking that they aren't being ripped off would be a start.

If someone can't be bothered to check to ensure they are getting a competitive price then they'll find plenty of suppliers to take their cash. That goes for whether we are talking about energy or any other goods.

shortchanged_2

The other problem is that the energy suppliers (quite likely deliberately) make changing companies quite difficult.

This keeps a fear factor in the market which is particularly strong for the elderly. My father being a prime example. The number of times I have told him to change supplier only to get the same response 'It's all too much hassle.'

pqrdef

And yet there's now a whole industry of marketing firms and comparison sites which exist to encourage people to switch, and make their money out of switching.

But the last thing they want is a transparent market. If switching becomes too easy, this only brings on the day when the suppliers all charge the same prices and there's no point in switching.

Hoopie1

pqrdef wrote: »

So what do we really want?

Personally, I would like to see:
1) An end to selling by confusion by the utilities (not that they're on their own in doing this).
2) The utilities being given permission to change prices twice a year on the same date. So on the 1st April and 1st October each year, they are allowed to announce their changes to prices. This means that you won't sign up for a cheap tariff and then see the price jacked up three weeks later and prevent the current circus that we have in place where on changes and they all follow suit over a period of weeks.

michaels

But in every other market there is competition, probably confusing pricing (BOGOF anyone) and yet we do not complain that others pay more because they can't be bothereds to shop arround so why is energy different. And switching is not harder than changing mobile phone provider.

Hoopie1

michaels wrote: »

But in every other market there is competition, probably confusing pricing (BOGOF anyone) and yet we do not complain that others pay more because they can't be bothereds to shop arround so why is energy different. And switching is not harder than changing mobile phone provider.

That's the problem though, there is a lack of competition (that's the view of OFGEM, not me).

daveyjp

"we do not complain that others pay more because they can't be bothereds to shop arround "

But this was shopping around - Which? called every provider 12 times and asked for their cheapest tarriff. How much more shopping around do you want them to do? Fact is they lied to callers who in all intents and purposes were customers wanting to switch tarriffs for a better deal - isn't this was competition is supposed to be about?