MSE News: Ofgem outlines plans for simpler energy tariffs

Consumerist

Bark01 wrote: »

okay, but they are not allowed to track against 'evergreen tariffs' like most of today's tariffs do

Quite right. I think the tracking has to be through an index, or similar, over which the supplier has no control.

Consumerist

Cardew wrote: »

The problem with a fixed standing charge is that it discriminates against those with very low consumption.

I agree. The problem is that two tier tariffs do, in effect, have the standing charge built in anyway. These effective standing charges vary wildly and are essentially disguised by the energy suppliers.

On balance, I would prefer that all suppliers were forced to have the same standing charge so that we can see just what they are charging to compare with the competition. The less-scrupulous energy suppliers are not going to like this proposal, I think.

insanegloss

Consumerist wrote: »

On balance, I would prefer that all suppliers were forced to have the same standing charge so that we can see just what they are charging to compare with the competition. The less-scrupulous energy suppliers are not going to like this proposal, I think.

This is exactly the route OFGEM is proposing, a standing charge set by OFGEM and the Suppliers set their own unit prices.

"The compulsory regional standing charge will be set annually by Ofgem. We may also set a regional adjuster to the unit rate to account for regional differences in network costs that vary with consumption"

http://www.ofgem.gov.uk/Markets/RetMkts/rmr/Documents1/RMR%20Domestic%20Consultation%20December%202011.pdf (Sec 2.15).

Premier_2

Bark01 wrote: »

Okay so simpler tariffs, thumbs up!

No competition and expensive prices, MASSIVE thumbs down.

Thanks OFGEM.

8.3 out of 10 MSE'ers who expressed a preference said they would prefer more expensive prices in return for simpler tariffs.

Perhaps more people should be careful what they wish for in future :cool:

Cardew

Consumerist wrote: »

I agree. The problem is that two tier tariffs do, in effect, have the standing charge built in anyway. These effective standing charges vary wildly and are essentially disguised by the energy suppliers.

On balance, I would prefer that all suppliers were forced to have the same standing charge so that we can see just what they are charging to compare with the competition. The less-scrupulous energy suppliers are not going to like this proposal, I think.

On balance you may well be correct - there is no 'One size fits all solution'.

However how do you legislate to ensure all the various discounts offered are the same?

An E-On account I had recently was fairly expensive if you took the kWh prices in isolation, but the discounts for Dual fuel, on-line and direct debit were huge - 35%+?

Others offer a sizeable bonus after 12 months with the company. With one company it is 10% for just one year but with so many hoops to jump through, that I suspect that very few will qualify. Certainly not the unsophisticated customer to whom this Ofgem directive is aimed.

MillicentBystander

Cardew wrote: »

On balance you may well be correct - there is no 'One size fits all solution'.

However how do you legislate to ensure all the various discounts offered are the same?

An E-On account I had recently was fairly expensive if you took the kWh prices in isolation, but the discounts for Dual fuel, on-line and direct debit were huge - 35%+?

Others offer a sizeable bonus after 12 months with the company. With one company it is 10% for just one year but with so many hoops to jump through, that I suspect that very few will qualify. Certainly not the unsophisticated customer to whom this Ofgem directive is aimed.

But your final account from them wouldn't have included ANY of these various discounts, I believe. I wonder how many punters signing up with Eon are aware of this particularly sneaky T&C?? 0.5%?

Consumerist

Cardew wrote: »

An E-On account I had recently was fairly expensive if you took the kWh prices in isolation, but the discounts for Dual fuel, on-line and direct debit were huge - 35%+?

You don't say whether your contract was a fixed- or variable-tariff.

If it was a variable tariff then this sounds to me like the classic trap. Half way through the contract the supplier increases prices and the customer wants to switch. No termination fees (normally around £30 per fuel) but all the (35%+) discounts, which put the tariff at the top of the comparison tables, are forfeited and the customer finishes up paying a fortune without realising it.

yippeekiay

Cardew wrote: »

The problem with a fixed standing charge is that it discriminates against those with very low consumption.

i.e if the standing charge is, say, £100 per year and kWh charge is 10p/kWh someone with an annual consumption of 1,000kWh is paying 20p/kWh whilst someone using 7,000kWh is paying 11.42p/kWh

Spot on!!! :T

Hi everyone, from a long time lurker

In my case in regards to gas usage, I use even less than 'very low'.

Since moving my supplier in May I have used 2 units - yes, TWO. That equates to roughly 22 kwh in 7 months!!

Because of the price of gas I decided that I would only use it for cooking the odd thing here and there so changed my supplier to suit my usage. I use a fair amount of electricity and with respect/contrary to another post of yours regarding gas being cheaper than electricity for heating, this is far from being the case for myself which is why I ultimately chose a supplier with the cheapest electricity charges.

Just to show you the difference here's my own findings....
If I have my gas fire on for an hour it uses 0.6 units i.e. 7kwh (putting out far less than that in actual radiant heat!!!), each kwh currently costs me 7.78p + VAT for the first 4572kwh per year (not 3p to 4p as you have posted recently) which means around 57p an hour inclusive of vat. I actually use a small fan heater instead which only costs 12.5p for the same hour thus costing just over a fifth of the price and I find it more than sufficient to keep me warm on that setting - being it's lowest. Ok, having the gas fire on full for an hour would get a bit toastie even for my thin blood as it may be putting out an optimistic 3kw (it feels much less) of heat but even if I put it on low it would still cost 19p an hour and result in a lower overall room temperature. Therefore using electricity is a no brainer for me.

If I had to pay any standing charge it wouldn't be worth having gas at all as the cost per kwh would be HUGE, also I would then not be able to benefit from the dual fuel discounts I currently receive if they continue in the future.

In conclusion....
I can't understand why a simple single charge for all units can't be sorted out for either/all fuels, then you simply pay for your usage which as far as I can see would be the fairest way all round. This system should also happen on other utilities i.e. water, as the standng charge far outweighs my usage. I could add road fund license to this group too but that's another debate.

In this ever environmentally conscious society surely a low all round user - or should I say polluter - like myself should be rewarded for my low use - not penalised!!.

Sorry for my first post being so long and a bit of a rant but I had to get some of these gripes/thoughts off my chest.

Oh...and who in the dickens voted for paying more for an easier system!!!!!!! :wall:

Paul aka Yip

MillicentBystander

But the only people paying more would be so called savvy punters/rate tarts/fly by nights like us who are basically signing up to falsely cheap tariffs where a %tage of our fuel is effectively paid for by the energy company's standard tariff punters! That can't be fair even though it's going to cost us more! We are very much in the minority as well; 75% of punters remain on standard tariffs. The energy companies are basically charging their most loyal customers more than they should so that they can charge us less than they should! Is that fair, honest and transparent? Absolutely not.

Cardew

Consumerist wrote: »

You don't say whether your contract was a fixed- or variable-tariff.

If it was a variable tariff then this sounds to me like the classic trap. Half way through the contract the supplier increases prices and the customer wants to switch. No termination fees (normally around £30 per fuel) but all the (35%+) discounts, which put the tariff at the top of the comparison tables, are forfeited and the customer finishes up paying a fortune without realising it.

No it was a fixed price, fixed term tariff and although, as stated above, you didn't get that discount on the last bill, I did get the discount right up to the day the tariff finished and was on their expensive standard tariff for a few weeks until the switch came through.

It was Fix on-line 8 finishing 01 JUly 2011 this is what the E-On rep wrote in the very long thread on this tariff.

As brewerdave says, please be aware of our policy of not giving discount on final bills when changing supplier. If you move before the end of the contract on 1 July, you will not receive any of the Fixonline 8 discount on your final bill.

In this case, it will probably benefit you to ask for a bill just prior to your leaving date.

Should the switch complete after the end date of Fixonline 8, you'll receive all the discount applicable to this tariff even if part of this falls within the final bill.

The point I was making is that it will be almost impossible to get a level playing field with the many options of discounts available..