How would you change the energy market?

Former_MSE_Archna

Ofgem's current consultation closes soon and MSE is planning on responding. It would be great to know your thoughts so we can feedback to the regulator.

You can read about the retail market review here: http://www.ofgem.gov.uk/Markets/RetMkts/rmr/Pages/rmr.aspx

We have some opinions, but it would be great to know what you think about the following:

• Should the number of tariffs be capped?
• Should tariffs be a single rate (so no low rate or high rate?)
• Should discount structures be simplified (ie prepay meters or direct debit discounts factored into the basic rate you pay)?
• What do you think of exit fees?
• What would make it easier for you to understand energy bills?
• Would it help to have an energy equivalent to 'APR'?
• What's difficult to understand on a bill?
• What's your experience of collective switching?

Thanks all

grahamc2003

I'd be done with all the pointless areas of work surrounding the gas and electricity markets (like the need for your questions) and re-nationalise them.

Whatever the faults and inefficiencies of the Gas Board and the CEGB, they all fade into insignificance compared to the current madness they have evolved into, supposedly to introduce competition. Very little of the industry is now about getting gas in pipes or electricity down wires - it's all about pointless efforts like systems for switching, devising incomprehensible tariffs, employing high commission/high pressure agents to get you to switch, hiring masses of largely untrained help centre staff, putting extremely inefficient generation technologies onto the grid, loading bills with indirect taxation and hundreds of more non-core functions the industry now has to do which it wouldn't under nationalisation.

Time to admit the free (yet highly regulated!) gas and electricity market has failed spectacularly. I'm sorry to say I speak as one who helped devise several of these non-core processes and supported privatisation at the time.

Wywth

Should the number of tariffs be capped?

No. let market forces dictate the number of tariffs suppliers wish to offer.
If we want a free market to promote competition, then restricting the number of tariffs does not achieve this.
If we don't want the market to decide, the re-nationalise the whole industry

Should tariffs be a single rate (so know low rate or high rate?)

No, again let the market decide.
It's usually the most complicated tariffs that result in the best possible deals.

The re-introduction of daily standing charges (ilo 2 tier pricing) penalises the low users, (especially gas users who may only use such fuel in the winter) often the poor who are already struggling with increasing fuel prices.

Should discount structures be simplified (ie prepay meters or direct debit discounts factored into the basic rate you pay)?

No. Consumers should pay for what services they use (e.g. the added cost of a PPM) or be offered savings where these are possible (e.g. due to cost savings the supplier experiences by the customer agreeing to pay monthly by DD)

What do you think of exit fees?

They are acceptable where a fixed or capped rate is offered for a certain term. They are less acceptable if applied to a variable rate or for longer than the fixed/capped term, although as they are waived where a customer suffers a disadvantage (e.g. because of a price rise), it is not the most important of the issues.

What would make it easier for you to understand energy bills?

This is difficult as some suppliers are already very good, but other not so.

It simply needs meter readings, difference (and how this is converted to kWh for gas), cost per unit, sub total, discounts applied (and details how), Total.

Would it help to have an energy equivalent to 'APR'?

Not really. The cheapest total annual cost is the important thing. This varies by region and consumption levels, so a way for consumers to be advised this is the most important.
I think bills show this (at least some suppliers show this for the individual user), comparison sites show this, and perhaps the supplier's website should allow a user to obtain their anticipated annual cost based on region and consumption

What's difficult to understand on a bill?

How recorded gas units on the meter translates to kWh isn't that easy for some to understand. It includes a volume conversion factor of 1.02264 (I think Europe told us we had to to this many years ago) and variable calorific value anything between about 37 and 42 (not sure how you make this fairer/easier)

What's your experience of collective switching?

I have no personal experience of using it for gas & electric, but on the recently published ones, the suppliers that opt to quote simply quote one of their existing tariffs anyway, so you could get this from a comparison site (and keep any cashback yourself).

C_Mababejive

I think the whole tariff market should be wide open and suppliers should be able to offer as wide and diverse a range of tariffs as possible.

I think that OFGEM as a regulatory body should be the subject of an enquiry and close scrutiny as they are now a danger to the public.


I think that households which have combi boilers should be subjected to an additional tax.

Ken68

Link an energy survey to every household council tax bill.A reduction according to results for that type of property. That will force people to insulate.
After the next snow just take a walk around, see which property has the snow melting fast.

Former_MSE_Archna

Thanks for the replies folks.

25.6_Pre-contract_oblig

Hi MSE Archna,

Please ask Ofgem to look at the thread:

FAO Ofgem and Secretary of State DECC - 3 points
https://forums.moneysavingexpert.com/discussion/4348967

The 'regulated free market' is not working.
Reforming the Ombudsman 'service' is a common theme.

25.6_Pre-contract_oblig

[Deleted User]

Please OFGEM look at this thread and understand that there are serious levels of energy theft in the UK centred in the city and town centres in the "deprived "areas. This theft is predominately on prepay meters. The suppliers are governed by the " bean counters " and have given up, in my opinion in monitoring prepays. They do not get mandatory 2 year inspections, many have not been checked for years and years since they were updated from card to key meters. If the householder,tenant doesnt fancy opening the door to us, thats as far as it go s. Suppliers wont bother with warrants and locksmiths . its too costly for them, as is the effort to prosecute them in the magistrates courts when they get caught for stealing thousands of pounds worth of energy.
Energy theft is definitely on the rise, I am finding more and more, even in outside boxes on full view. Most of my colleages dont actively look for bypasses, and most dont know any, or all of the tricks employed. There has never been a better time to fiddle your meters than now, with all these suppliers all trying to keep costs down to maximise profits.

jalexa

Direct Debit recalculations to be mandated to be a 12 month rolling calculation.

yangptangkipperbang

EVERYONE who has an energy account in their name should undergo a compulsory training course on:

1. How to read a meter.
2. How often to read a meter.
3. How to find out what they are being charged by their supplier for each kWh.
4. How to use 1, 2, & 3 above to calculate how much they are paying for the energy they use (per day/week/month)

Pincher

Look to cable TV, and run it as a regional monopoly, on ten year renewable licenses. Oil and solid fuel are regulated separately.

The distribution infrastructure should be part of the license.
Inspection of maintenance work should be coordinated by OfGEM, but carried out by licensees, who should report substandard work of their competitors. Independent audits from a roster of engineering firms should be commissioned on a rotational basis.

Licensees must put up assets as guarantees of service level, and pay fines or lose the collateral when in breach of license.

No financial bloc may hold more than 30% of regional licences.
Not even Virgin.