MSE News: Ofgem outlines plans for simpler energy tariffs

Bark01

JimmyTheWig wrote: »

If the standing charge is set by Ofgem (which they are saying they will do, I believe) and this standing charge is set at a level which covers the cost of having someone as a customer then I think that this is fair.
Our old local newsagent used to charge a fee for delivering newspapers. You paid this fee plus the cost of the newspaper. If you wanted a second newspaper delivered then the extra you would pay would be the cost of the second newspaper as you were already paying for delivery.
This means that people with two newspapers are getting better value than those with one. Is this fair? Yes, because it reflects the newsagent's costs in providing the service.

Only problem is not all suppliers have the same fixed costs, so BG will have a big advantage because their cost are cheaper due to there size.

Cardew

Consumerist wrote: »

Yes, if the supplier increases prices during a fixed-term variable-tariff contract, the customer notifies the supplier that the increase is rejected and then switches supplier. The increase will be "stayed" until the switch is completed if it's within a "reasonable" time.

Just writing that down highlights the utter complexity of modern-day energy contracts.

The above is correct, but doesn't address the query posed by davidgmmafan about my post! i.e. he was querying this quote.

"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."

I was on a fixed term, fixed price, tariff and that tariff(and hence agreement) ended on 01 July 2011.

On 01 July I was moved to another tariff, which obviously entailed a price rise. I couldn't have insisted that I remain on my old Fix on-line 8 tariff while I switched.

Had Fix on-line 8 not been a fixed price, and they had increased the price, then your point above would have applied.

P.S.
In any case the big advantage of FOL 8 was the discounts, and I wouldn't have had them on my last bill anyway.

JimmyTheWig

Cardew wrote: »

Should there be social tariffs funded by other customers?

No, the whole thing should be nationalised and social tariffs (or why not everyone's standing charge) funded by the government.

HappyMJ

JimmyTheWig wrote: »

No, the whole thing should be nationalised and social tariffs (or why not everyone's standing charge) funded by the government.

And who funds the government?

Consumerist

Cardew wrote: »

The above is correct, but doesn't address the query posed by davidgmmafan about my post!

I take your point but my intention was to indicate the only circumstances in which a customer can insist that prices are held during a switch.

The best that can be done at the moment is to start the switching process 4 - 5 weeks before the end of a current contract. There is a 7 - 14 day cooling-off period (check that with the new supplier) and switching should take about 3 weeks from the end of the cooling-off period. This should minimise the period spent on the default tariff.

JimmyTheWig

HappyMJ wrote: »

And who funds the government?

We do, clearly, but hopefully in a fairer way (i.e. taxing those who can afford to pay) than by paying through our energy bills.

psdie

An idiotic idea - there's nothing complicated about it if you use a comparison site with your existing usage data. "Simplification" is just a euphemism for price rises.

See "tax simplification", such as when they did away with the £10k lower rate to "simplify" the system, and how they're now proposing to merge NI + income tax, whereas currently your NI contributions are capped at a certain level (plus negatively affects small businesses).

JimmyTheWig

But the comparison sites route is obviously too complicated for many, psdie, as many don't use them.

Hopefully, then, this simplification will lead to increased competition, which will lead to lower prices. Hopefully.

dude89

psdie wrote: »

An idiotic idea - there's nothing complicated about it if you use a comparison site with your existing usage data. "Simplification" is just a euphemism for price rises.
QUOTE]

The problem being is that if everyone did this then there would still be price rises as the companies would have no one left on standard tariffs to cover the costs of the cheapest tariff

Consumerist

psdie wrote: »

"Simplification" is just a euphemism for price rises.

The problem is that, at the moment, the best deals are only effectively available to the few who know their way around the system. The savings for the few are being paid for by the majority who don't know their way around the system and that is what the simplification is intended to address.

Whether it eventually does address the lack of switching, only time will tell.