David Cameron writes for MSE on his plans to help on energy bills

SwanJon

magyar wrote: »

I made up the numbers, mainly because I couldn't be bothered to look it up, but both of those structures exist. But if you want a couple of real ones:

It wasn't the numbers, it was the standing charge AND two tiers, the annual AND monthly discounts that made your tariffs look overly complicated.
Compared to yours npower's and Scottish Power's look simple!

magyar wrote: »

*edit* - just noticed you say you work for British Gas! Come on, you should know this stuff!

Yup, I do, but the water is muddy enough without more complex examples than really exist.
A spreadsheet could work them out, but that's no better really than a comparison website as many people won't feel they understand it unless they've done the maths themselves.
Ofgem wants a fixed standing charge (probably one each for gas, electricity per region) and the suppliers can then vary the p/kWh - nice and simple but low users get stung.
Actually probably another for E7. That's 250 tariffs already (6 suppliers) before you get to green, 1 fix per year etc.

magyar

SwanJon wrote: »

Compared to yours npower's and Scottish Power's look simple!

Alright, fair point. I might have overdone it a bit, but they're hardly simple...

SwanJon wrote: »

Ofgem wants a fixed standing charge (probably one each for gas, electricity per region) and the suppliers can then vary the p/kWh - nice and simple but low users get stung.

Another thing they could of course do is avoid regional pricing. We all know that utilities price highest in the regions where they used to be the REC, so living where I do in an SSE region, SSE will NEVER be the cheapest because frankly they're fleecing people who never switched.

davidgmmafan

I've been thinking about this for the last few days and maybe there are a couple of alternative views.

Maybe there's a method in the madness. Maybe the government urging everyone to contact their supplier is a brilliant plan to boost employment. You see the suppliers will be very busy and may think blimey we need more staff to take these calls. They'll launch a massive recruitment drive thus lowering the unemployment figures.

This will work fine for about six months until they need to raise prices again to pay for the additional staf... Hmm nevermind.

There are other things I've thought of though, maybe the government initially did take a hardline and the energy companies made counter arguments like have you got two hundred billion lying around? Or pointing out the cost of green requirements? I don't know what happen as its supposed to be confidential.

The best I can do is say if they do manage to increase switching this should be a positive development and I guess clears the way for a competition commision referral if/when the market is shown to still be broken.

undaunted

magyar wrote: »

It seems rather bizarre that they appear to have gone into this meeting with no idea what they wanted to get out of it, and as you say have then come out saying more or less exactly what they could have said anyway.

Fairly typical of the way this Government seems to be running isn't it?

insanegloss

magyar wrote: »

Alright, fair point. I might have overdone it a bit, but they're hardly simple...



Another thing they could of course do is avoid regional pricing. We all know that utilities price highest in the regions where they used to be the REC, so living where I do in an SSE region, SSE will NEVER be the cheapest because frankly they're fleecing people who never switched.

The problem is, different regions have different distribution costs due to the 13 different regions having different companies running them. Also the costs differ between each area due to things like topography of the land, population (ie more wiring, plyons, staff) etc etc.

Sure you can average these out and have a single rate for the country, but what about if you have lots of customers in a cheap distribution region and want to expand your customer base in other more expensive region? You'll end up becoming less competitive all over with higher costs per customer.

And yes, they do tend to price higher in their 'home' regions and rely on people not switching. From a business perspective, its the natural thing to do, you've got your cash cow and this subsidises you to be very competitive elsewhere.

magyar

insanegloss wrote: »

And yes, they do tend to price higher in their 'home' regions and rely on people not switching. From a business perspective, its the natural thing to do, you've got your cash cow and this subsidises you to be very competitive elsewhere.

I totally agree that from a business perspective it makes sense, but as I say everyone in the business knows this is something that energy companies exploit - that doesn't make it right.

And I don't think different regional costs make all that much difference: TNUoS costs are socialised and so it's just the local distribution company differences in things like staff costs etc. It would hardly be the end of the world for those to be socialised too. Yes, it might mean prices rising in some areas, but other areas should be cheaper.

They key is that given we've been deregulated for 20 years there's no excuse for still having links between companies and their old home areas.

chanz4

we give gas & electric companys abuse, so why not fuel companys...

grizzly1911

SwanJon wrote: »

Actually probably another for E7. That's 250 tariffs already (6 suppliers) before you get to green, 1 fix per year etc.

I guess it doesn't really matter what OFGEM do the companies will just invent another level of marketing ploys to baffle everyone with such as phone companies inviting you to pay up front for a golden handcuff discount on rental whilst leaving another part of the tariff variable.

Katie-Kat-Kins

It is all very well urging people to switch but some of us who pay the highest fuel bills are trapped with one or maybe two providers and very little competition. I have an E10 meter and unless I want to have this changed I can only use NPower or EDF, so I don't get the opportunity to make the most of the competition in the market.

I am not going to have my E10 meter removed as then I will be unable to keep my house warm in the evening without resorting to expensive space heaters.

Electric heating is often fitted in low cost housing and yet it is hellishly expensive to run. There seem to be no grants or incentives to help those without a gas supply and they are restricted in their choice of energy supplier paying higher "per unit" rates than those who don't heat their house with electricity.

Katie-Kat-Kins

lynzpower wrote: »

Cos its a luxury innit. :eek:

certainly the first "X amount of units" should be vat free.

And vat for higher users should kick in after X amount of units.

And it should be higher users. And what classes as a higher user should never vary.

Oh yeah great proposal to penalise those of use without gas AGAIN. So we would be classified as high users and pay VAT on our electric and be incapable of taking advantage of the "low user" exemption for gas. So all of those people living in properties without gas central heating who already pay more to heat their homes and are already penalised by not being able to use dual fuel discounts would be penalised again.