pricefixing or competition???

mumbles_one

How can there be any competition in the utilities market ??? the companies are not competing by selling different products???? because the "product" is identical.
Other industries such as the motor industry actually "make" different products and price them accordingly whereas the electricity companies just buy electricity and sell it on without actually doing anything to add to the value of the prodiuct. All they do is "fix" the price and let the money roll in. Its a monopoly and might as well be in public ownership where any profits would be a public asset.

Terrylw1

Its largely a sellers market since customers can easily be tempted over the fence.

One of the biggest problems in this market is that through deregulation they thought there would be all these independent companies trying to lure customers away from the old host supplier. In fact, ofgem actually mposed regulations on the host region being unable to compete which is an unusual move when trying to encourage them, but it was to prevent regional monopolies and it caused suppliers to shift their customer bases but they still retained most of their region. Ofgem then remove this regulation.

Sadly for ofgem there was one strategy they didn't think of...utilities buying each other out as they quickly became PLC's. The utilities realised it was far less hassle to gobble up the market instead...ofgem didn't prepare for the future, then everything became a market of 6 with difgivulties or smaller companies coming in, since some of them just got bought up.

sparkyrod

Maybe I am missing something or are we the customers being taken for a ride by energy companies. I have sent the following off to my energy provider e-on concerning gas prices. Would be interested in any comments here, especially if my facts are wrong.

I am a customer of yours,have been for many years. Could you please explain why you have kept your gas tariffs so high during the last year, infact increasing them. I notice on the spot markets that natural gas prices over the last year have steadily dropped from nearly $5 to $2, a very large decrease in price. Why have yourselves and the other energy companies not passed this reduction on to your customers.

Terrylw1

sparkyrod wrote: »

Maybe I am missing something or are we the customers being taken for a ride by energy companies. I have sent the following off to my energy provider e-on concerning gas prices. Would be interested in any comments here, especially if my facts are wrong.

I am a customer of yours,have been for many years. Could you please explain why you have kept your gas tariffs so high during the last year, infact increasing them. I notice on the spot markets that natural gas prices over the last year have steadily dropped from nearly $5 to $2, a very large decrease in price. Why have yourselves and the other energy companies not passed this reduction on to your customers.

Gas has dropped before as well but the decreases don't come, but a increase in wholesale cost and...immediate increases. Blame ofgem for having no control over this market.

I'm sure every supplier would respond with a press statement on your question that won't actually answer it.

lithopsian

First, the products are not the same. This big energy retailers are all energy producers also, with a varying mix of power supply sources including their own power stations. Some of them also produce their own gas or coal for direct supply or for electricity generation. Beyond that they go to the infamous wholesale market but not at spot prices. The majority of their bought-in supplies are done on a forward basis, partly for some price stability but also to guarantee the supply.

So once you gain a complete understand of the energy markets, including factors such as government mandates on green energy production and energy saving "initiatives" that must be funded by the big six, then you will be in a position to criticise the pricing behaviour of the energy companies. Until then you can certainly criticise them, but basically you're just whining that your bills are too high which we all knew anyway

There is one and only one elephant in this particular room. There isn't currently enough gas sloshing around Europe, and especially from our North Sea that coddled us for the last forty years, for all the people that want it so the price is increasing year on year. Everything except gas is even more expensive both for electricity and for running our boilers, with the best possible hope that things like wind and nuclear power could eventually become competitive with the ever-more-expensive gas and basically stop prices increasing so fast. Until we find a whole lot more gas (which might already have happened, if you want to look on the bright side), the economy really tanks worldwide, or someone invents a new magical way to produce electricity, we will be able to keep complaining about high prices.