MSE News: Eon to raise energy prices

SnowMan

Kushan wrote: »

That may well be a good idea, but why is E-on being singled out here? As far as I'm aware, no other energy company does this and really, E-on has come closest with their price promise. Yet they're being made out to be the bad guys in all this?

I think the EON case is just a good recent example of a practice of encouraging people to switch on arguably false pretences prior to a price rise. The article could just as easily have covered customers switching to a variable rate tarriff with another company only to find out that variable tarriff had increased by the time they had switched. So perhaps it would have been better for the article to give examples involving other companies also rather than singling out EON.

But it is a good illustration of why the 6 month idea is a simple and good idea.

I personally think EON have really turned things round since their reset review (in terms of being fair to their customers) and have to say I would have no hesitation in switching to them if they were cheapest when my existing tarriff ends. And I think their reps do a great job on this forum.

To add some balance as to other company practices I don't like:

The npower direct debit discount of £100 that is only paid after a whole number of years is an absolute disgrace. It enables npower to look cheaper on the comparison sites and yet customers in practice don't or even can't switch away after a whole number of years and so don't end up paying the quoted price.

And EDFs refusal to provide customers with their direct debit calculation is an absolute disgrace. They come across as the worst by far of the major suppliers, albeit I have never been supplied by them

Wywth

Kushan wrote: »

That may well be a good idea, but why is E-on being singled out here? As far as I'm aware, no other energy company does this and really, E-on has come closest with their price promise. Yet they're being made out to be the bad guys in all this?

First Utility currently promise to fix prices for 3 months from date of customer registration. :T

But they are the only company I know that currently offer this type of promise.

Wywth

SnowMan wrote: »

And EDFs refusal to provide customers with their direct debit calculation is an absolute disgrace. They come across as the worst by far of the major suppliers, albeit I have never been supplied by them

EDF provided me with mine when I switched.

It is 1/12 of the annual anticipated consumption cost based on the usage I declared.
(It is calculated separately for each fuel, despite being on a dual fuel tariff and, after the initial collections, only one monthly total payment being collected)

JimmyTheWig

Kushan wrote: »

That may well be a good idea, but why is E-on being singled out here? As far as I'm aware, no other energy company does this and really, E-on has come closest with their price promise. Yet they're being made out to be the bad guys in all this?

I think the problem is that e-on's price promise makes it look like they are coming closest but really they are doing very little of the sort.
If it takes two months to switch then a promise in November that prices won't rise until January is meaningless - but sounds good.

Michael_Nottingham

Snowman - I did read the original article

However I also thought through the costs and implications

I am sorry but what you suggest will just encourage even more all the Big Six to move at exactly the same time - the costs of being forced to hold the price for 6 months at this time of the year are likely to be c£50 - compare this to the profit for an average dual fuel customer.

Also think through the IT complexity of giving every customer a fixed 6 months from switch.

Wywth

JimmyTheWig wrote: »

I think the problem is that e-on's price promise makes it look like they are coming closest but really they are doing very little of the sort.
If it takes two months to switch then a promise in November that prices won't rise until January is meaningless - but sounds good.

It typically takes 4-6 weeks to switch supplier, and the E.on promise was first made (as far as I can tell) as early as last May.

Michael_Nottingham

Also, if they were left on the rate they switched on for six months, are you proposing that this would happen even if prices drop (i.e. they would be left on the higher rate?)

In reality all this will do is skew the market back to benefit serial switchers if their prices are fixed for 6 months while existing customers prices can go up - non switchers will just end up paying for it as their prices are moved more quickly.

I thought one of the key reasons for the recent OFGEM / Government changes was to ensure that existing customers weren't disadvantaged with all the focus on switchers.

The truth is always more complicated than a newspaper strapline, but we have to be very careful that additional rules do truely drive competition / customer improvements.

A good example is how the recent changes for online tariffs have led to lower discounts for switchers as the price differential has narrowed.

SnowMan

I did read the original article

I'm not quite sure then why you asked what MSE would do when it was a set out in the article that you had just read?

Michael_Nottingham wrote: »

I am sorry but what you suggest will just encourage even more all the Big Six to move at exactly the same time - the costs of being forced to hold the price for 6 months at this time of the year are likely to be c£50 - compare this to the profit for an average dual fuel customer.

It is probably better that if they are all going to have to put up prices then the changes are announced closely together. Otherwise there is a period where everybody has difficulty switching because they are comparing companies who have already announced their increases with those who haven't declared what they are going to do (but continue to market based on their old prices which they know customers won't be able to get by the time they switch as happened with EON).

Also think through the IT complexity of giving every customer a fixed 6 months from switch.

If an IT issue such as this was such a big consideration for them they wouldn't have introduced the huge and complex series of tarriffs that they currently have and would have kept to simple tarriffs their systems could cope with.

If they can't program such a simple thing into their systems then they need to rethink their IT systems.

They are already under an obligation to keep someone on the old tarriff rates where they switch away following a variable tarriff increase and the switch physically occurs after the increase. Presumably you would argue against that as well using an IT excuse?


Thanks for your thoughts it has made me even more convinced the 6 month thing is a good idea.

MillicentBystander

BG's new IT system reportedly cost HALF A BILLION POUNDS - I really don't think excusing the Big 6 on account of a new measure being difficult from an IT POV will hold water, do you?

Michael_Nottingham

If you want to force them to all move at the same time - just tell them that they can only move on the 1st January each year

You haven't answered my point about how your proposal disadvantages non switchers