Ofgem gets it wrong

Damian68

The Ofgem recommendations on gas and electricity pricing are way wide of the mark. Low users will lose out very badly on the changes to the standard tariffs, as everybody on standard tariffs will have to pay standing charges. The utility companies have conned the regulators, as usual. Anyone with half a brain knows that standing charges are an enormous rip-off, because where gas or electricity are already connected to a property the costs of maintaining that connection are negligible. A system like that in Turkey, where users are responsible for supplying the meters would be much fairer. I read many posts on other threads where money savers said that standing charges would be got rid of, so I hope that there will be a big backlash against this proposal.

Farway

Or maybe low users, like me, will switch to not for profit companies, like Ebico?

Works for me

MillicentBystander

Farway wrote: »

Or maybe low users, like me, will switch to not for profit companies, like Ebico?

Works for me

The problem with Ebico is that if all of their customers were low users I have a feeling their business model would struggle somewhat. My suspicion has always been that the Ebico customers that would be paying a lot less elsewhere tend to subsidise the low users.

Damian68

Millicent, you appear to have been brainwashed by the power insustry. Of course, by definition, the companies will make better percentage profits out of high users. However, it is misleading and unhelpful to say that high users subsidise low users because when the infrastructure is in place the costs associated with the individual's connection are minimal. The companies still make money from low users, even though it appears that they may have convinced Ofgem otherwise. It is in the companies' best interests to maximise the standing charges whenever possible, because in reality these are money for nothing.

diamonds

Standing charges are meant to cover the network national grid costs but given thats !!!!!d out to many companies now we pay more as more companies need more profit

sheffield_lad

Damian68 wrote: »

Millicent, you appear to have been brainwashed by the power insustry. Of course, by definition, the companies will make better percentage profits out of high users. However, it is misleading and unhelpful to say that high users subsidise low users because when the infrastructure is in place the costs associated with the individual's connection are minimal. The companies still make money from low users, even though it appears that they may have convinced Ofgem otherwise. It is in the companies' best interests to maximise the standing charges whenever possible, because in reality these are money for nothing.

If they did away with standing charges it would still end up in the tariff somehow. We have it now with the first so many units being charged higher.

What todays revelation '£125 profit for each duel fuel customer' shows is it' has very little to do with greedy utilites and more to do with the rising cost of all types of fuel. The days of cheap energy have gone.

MillicentBystander

Damian68 wrote: »

Millicent, you appear to have been brainwashed by the power insustry. Of course, by definition, the companies will make better percentage profits out of high users. However, it is misleading and unhelpful to say that high users subsidise low users because when the infrastructure is in place the costs associated with the individual's connection are minimal. The companies still make money from low users, even though it appears that they may have convinced Ofgem otherwise. It is in the companies' best interests to maximise the standing charges whenever possible, because in reality these are money for nothing.

I was talking specifically about Ebico and its specific business model. They basically resell SSE. And if everyone of their customers was a low user paying on receipt of bill by cheque each quarter my assumption is the business model of Ebico would struggle. That's all I was saying.

moonrakerz

Damian68 wrote: »

Anyone with half a brain knows that standing charges are an enormous rip-off, because where gas or electricity are already connected to a property the costs of maintaining that connection are negligible.

Do you write for the Daily Wail as well ?

A typical piece of ill informed rant !

"Anyone with half a brain" can see the holes in your argument.
Existing connections never need any money spending on them ? Power lines never get damaged, brought down by gales or snow/ice ? Gas lines never need any work doing on them, replacing them after 30 years in the ground ? Who pays the repair men on Christmas day when your power goes off ??

If you can't say anything sensible, don't.................................

mattcanary

howee wrote: »

If they did away with standing charges it would still end up in the tariff somehow. We have it now with the first so many units being charged higher.

What todays revelation '£125 profit for each duel fuel customer' shows is it' has very little to do with greedy utilites and more to do with the rising cost of all types of fuel. The days of cheap energy have gone.

You think £125r.00 profit per year per customer is not a lot??!! (albeit the figure was far less than this only a few months bac)

undaunted

Ofgem, getting it wrong? Surely not!

Whether he's ever actually looked at Ofgem I've no idea but Lord Sugars comment on Civil Servants in business - hard to see what they do all day - always seems apt to me.

Whatever Ofgem do do it certainly isn't help customers in my opinion.

I'd be inclined to agree that whether "standing charges" are billed as such or just hidden in some other term or cost they will ultimately be there somewhere. It's the massively raising costs & profits issue which needs to be looked at