MSE News: David Cameron 'should fix broken energy market'

rogerblack

MillicentBystander wrote: »

Just can't be bothered to debunk this total nonsense argument again so here's the link to the thread

https://forums.moneysavingexpert.com/discussion/4235837

The points raised about the above argument in that thread seem at best weak.
Certainty, if exchange rates alter, there will be transient misalignments, due to contracts being signed at differing exchange rates.
But energy costs are fundamentally tied to the price you can buy energy on the global market.
To simply ignore the fact that we have amongst the cheapest energy in Europe is odd.

undaunted

Good on which! Unfortunately I increasingly doubt that Cameron, Clegg & co. will do much more than provide more hot air. They certainly haven't lived upto promises made so far!

As for DECC their words and promises of action would be great if they were ever actually translated into meaningful deeds for the consumer.

WelshGandalf

rogerblack wrote: »

A poster above raised the issue of single price per kWh, to have someone raise the 'but we need a standing charge for fixed costs'.
Do we?

Speaking as someone who used to work for a power company - and saw the full information of how the costs were put together - yes, we do.

Here are some things that are covered by the standing charge.
1) The guy who reads your meter needs to be paid.
2) The meter needs to be paid for, and replaced every-so-often (this is the law and is to reduce the chance of a meter going faulty due to old age).
3) The distribution company that owns the cables in the local area need money to maintain them (this is paid partly in standing charge and partially on unit cost).

These things are generally done by companies other than the supplier themselves. It's part of the liberated energy market we have - not only are there a range of suppliers, but the suppliers have a range of meter readers, meter operators etc. that they can use too.

A meter sitting there using nothing will still cost the supplier money every year, due to the above and due to admin costs. You may not like it, but it's a fact, and it's simple business sense to pass those costs along. Suppliers who offer a zero standing charge and a flat rate mysteriously seem to end up supplying loads of empty properties and losing money because of it.

I really don't like the MSE post saying suppliers are making "bumper profits" - yes they are making profits (something all companies try to do) but they aren't rediculous. If they made 0% the average consumer would save £50ish a year. If you're in fnancial hardship then £50 will not make everything rosy again...

annie1975_2

I read my own meter,(think they might read it once every couple of years).
How often do you have a new meter put in?.(Ive lived here 12 years and still got the same meter)..

The government are not A**ed about doing anything about the prices,because the more the energy company's make,the more the government make in taxes.

spot1034

annie1975 wrote: »

I read my own meter,(think they might read it once every couple of years).
How often do you have a new meter put in?.(Ive lived here 12 years and still got the same meter)..

The government are not A**ed about doing anything about the prices,because the more the energy company's make,the more the government make in taxes.

The government can't really do anything about prices other than stop requiring the addition of 'green' levies onto bills, which I doubt it will be doing anytime soon. Energy costs play a significant part in the calculation of inflation, which determines by how much pension and benefit rates are uprated each year. I supect this factor easily outweighs any advantage the government enjoys from VAT if charges have to go up. It also needs the energy companies to put up huge sums in the next decade to modernise our infrastructure, and they're hardly going to do that if they are forced to trade at a loss.

annie1975_2

Maybe the government should think about the winter fuel payments they reduced...
And the utility companys stop paying themselves millions of pounds in wages and bonuses.

WelshGandalf

annie1975 wrote: »

I read my own meter,(think they might read it once every couple of years).
How often do you have a new meter put in?.(Ive lived here 12 years and still got the same meter)..

From your tone you've already made your mind up and are wilfully ignorant of evidence but for anyone else who happens to read this I'll answer...

The data collector( http://en.wikipedia.org/wiki/Data_Collector ) and data aggregator do more than just collect out your meter reads, they have to estimate them if they can't get one etc, they charge a fixed rate per meter per day.

As for getting a new meter installed, it depends on how long your current meter is certified for. It could be anything from 10-30 years. Brief wikipedia page here - http://en.wikipedia.org/wiki/Meter_operator

rogerblack

WelshGandalf wrote: »

Speaking as someone who used to work for a power company - and saw the full information of how the costs were put together - yes, we do.

Here are some things that are covered by the standing charge.

Certainly I'm not arguing that fixed costs do not exist.
It does not have to be covered by the standing charge in principle, and could as easily, and arguably more reasonably in my view, be dealt with by a levy on units.
(with perhaps a fixed charge in the event of a property using no power)

rogerblack

annie1975 wrote: »

I read my own meter,(think they might read it once every couple of years).
How often do you have a new meter put in?.(Ive lived here 12 years and still got the same meter)..

As an aside, I recently (last week) had my meter replaced.
It took perhaps 20 mins from the guy hitting the front door.

The guy said he gets through 10 a day.
A simple estimate of what the costs should be might be 20 quid for a new meter, 10 quid for van.
Let's say it costs Scottish Power a grand a week to employ him, that's another 20 quid for his salary and ancillary costs.

So, 50 quid to change the meter, and the new one has a certified life of 20 years.

I would be interested in the actual amount of money flowing around the system generated by this, I suspect it's rather more than 50 quid.

(I note however that smart meters are likely to be fitted before the 20 years.)

WelshGandalf

You really think that it's better to offer no s/c unless they aren't using much in which case charge them a flat charge? Sounds more complicated to me, and wouldn't change how much your average consumer pays - the lack of s/c would be offset by the increase unit rate. Another problem is the suppliers don't know in advance how much you will use. So let's say a customer uses nothing and pays nothing, then after 12 months the supplier notices this and sends them a bill for £60. Do you think this customer will really be happier than if they had to pay 18p a day the whole year round?

As for your assentation that it would be "as easy" to pass on a charge that is incurred per day on the unit rate... I really don't understand how you can logically come to that conclusion. I'm trying to think of parallels in other industries. Let's say Sky TV, where you pay a connection fee and a monthly subscription. Sure, they may waive the connection fee, BUT that would be on the basis of a fixed contract length, so they know in advance they will get a certain amount of money £x from you. That's not true of electricity or gas as you could use nothing. Online shopping, again the majority of companies will charge for postage unless you're buying over £x of merchandise - so again it's waived if they know that they are sure they will be making a fair bit of money off you anyway.

Besides which, as I said earlier, any supplier who does offer a zero s/c ends up losing out from it as they end up supplying lots of empty properties.

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As for your meter costs post, you're not TOO far out, actually. £20 for a meter is a bit too low - these are well-engineered pieces of equipment that have to go through rigorous testing and have to be certified by an industry body, and have to function reliably for many many years. The price suppliers pay to the meter guys for putting a meter in tends to be £60 - £80, and there is reasonably effective competition in place to keep those prices down. The company I worked for actually switched who was installing our meters because, although they were really cheap, they also turned out to be pretty bad. For example they were awful at actually sending us the correct information about new meters they had put in; sometimes we couldn't log a customer read for months because of it, this then led to estimated/large bills and disgruntled customers. As with many things in life, the cheapest option isn't always the best. I'm sure the meter companies make some profit, but it's not excessive, else they would be undercut by competition.[/FONT]

(not sure why this paragraph has a different font)