Energy prices.... consumers need to get a grip.

grizzly1911

C_Mababejive wrote: »

I would also advocate fitting prepayment meters which would educate people and serve as a means of downwardly managing consumption.

And pay wildly inflated prices for the same commodity even though they have little added overhead (with card readers in place) and you have paid upfront. Not really MSE.

Dave_save

Profits are not really the issue here. The issue is the apparent lack of a truly competitive market which allows a 'cartel like' monopoly to exist. No amount of tinkering by Dave and his pals will stop us being held to ransom by the giants within the wholesale gas and oil markets. All his latest 'initiative' will do is increase the end costs for those who have made efforts to reduce energy usage and costs. We're now going through a phase where the supplier holds all the aces, and we as customers are dealt the same rigged hand over and over again.

All I would ask of OFGEM is to look closely at how the major suppliers are operating, how they interract with the market that supplies them, how they use their profits, how they innovate. I'd also want to know from OFGEM if they think some form of rationalisation of the industry would reduce costs for the customer. The whole energy supply system really does need a top to bottom review.

Having listened to the OFGEM guy on BBC this morning, I doubt very much whether he has the balls or the will to do this.

Cardew

Dave_save wrote: »

Profits are not really the issue here. The issue is the apparent lack of a truly competitive market which allows a 'cartel like' monopoly to exist. .

When exactly the same product(gas and electricity) is delivered to us by exactly the same pipes and wires, I cannot see much scope for real competition. The overheads of the various companies also cannot be too dissimilar.

The price of energy on the world market determines the price that the companies pay, and firms like Centrica(the parent company of BG) are forbidden to sell subsidised energy to BG.

When gas/electricity were privatised there were about 30 firms applied for a licence and they quickly found that there was little profit to be made, so most folded and handed their customer base to one of the Big 6. Even a non-profit organisation like Ebico isn't competitive for the great majority of consumers.

grizzly1911

Cardew wrote: »

When exactly the same product(gas and electricity) is delivered to us by exactly the same pipes and wires, I cannot see much scope for real competition. The overheads of the various companies also cannot be too dissimilar.


Then there is obvious duplication and we don't need 6 x overheads to manage it.

The price of energy on the world market determines the price that the companies pay, and firms like Centrica(the parent company of BG) are forbidden to sell subsidised energy to BG.

.

It is not subsidised energy that is the problem. Are the wholesalers/generators forbidden to sell inflated energy to their retail arms? In your example Centrica is the one that makes the money. Not dissimilar to the fuel market where the retailer works on fine margins.

stevemcol

If there is little or no competition ( I disagree by the way) it's our fault as consumers for not switching regularly.
If a penny on a KWh caused us all to switch, it would drive a price war.
Just this once, I think the model is OK and joe public aren't playing the game.

Terrylw1

stevemcol wrote: »

If there is little or no competition ( I disagree by the way) it's our fault as consumers for not switching regularly.
If a penny on a KWh caused us all to switch, it would drive a price war.
Just this once, I think the model is OK and joe public aren't playing the game.

But if there is collusion, consumers voting with their feet will be manipulated into selecting the supplier chosen by those colluding.

Its a market that is very difficult to access and the big suppliers seek to buy out smaller players as its easier than attracting business.

Something consumers also won't know is that newer players with customers under 50k don't have to adhere to areas of the Ofgem licence which is aimed at keeping costs down at start up...at the cost of the consumer who has little regulatory support until the supplier exceeds the threshold.