Which? : Ofgem's energy plans could cost consumers £55m

MillicentBystander

I think as long as the various discounts given have some basis in reality with regards to savings to the company then it's fine. Certainly the price difference between online deals and standard deals were impossible to justify hence the 'flattening out' we have seen recently.

Wywth

Cardew wrote: »

I have a '5p a litre off' coupon. Some places give Nectar points etc.

How did you get that coupon?
Did you have to spend something like £50 at a supermarket, and what other terms apply? Like is it limited to when it can be used, where it can be used and a limit against how much it can be used?
Perhaps the supermarket will start issuing similar types of coupons with similar restrictions if you agree to buy your power from them.

I don't think anyone has opposed the provison of Nectar points.

Cardew wrote: »

By not allowing companies to reward payment by DD it will add to the overall cost.

I don't follow why it will add to the overall costs.
The savings made by those who choose to pay by DD should be shared over the overall customer base, hence possibly lowering the headline figure.
Take a look at the ebico model, who claim the savings made by ebico customers who pay by DD effectively pay for the higher costs their prepayment customers would otherwise have to pay.

zerog

spiro wrote: »

...otherwise every unit will cost more to ensure SCs are covered and large users will suffer.

As it should be! Doesn't the government want everything to be "green"?

Pincher

I want a variety of tariff mechanisms, not a one size fit all bureaucratic inflexible nightmare.

You have to allow people who rent the flexibility of moving after a short period. People opening and closing account frequently incur admin costs, so they should pay more for flexibility, which is a principle well established for airline tickets.

On the other hand, householders who stay with a provider should be given loyalty discounts I want 1% per year, building up to 10% for the eleventh year.

Standing charge has to be paid somehow, but there is no reason why they can't be creative about it, and be different across providers. For example, using BT's Line Rental Saver as a model, you pay a year's worth in advance for a 20% discount. You don't get it back, but you can switch away penalty free, so you will only switch near the end of the contract year so as not to lose out. You decide whether you want to be locked in for a discount.

MillicentBystander

That's an exit penalty by another name and they shouldn't even exist in an industry that is supposed to be competitive!

Cardew

Originally Posted by Cardew


By not allowing companies to reward payment by
DD it will add to the overall cost.

Wywth wrote: »

I don't follow why it will add to the overall costs.
The savings made by those who choose to pay by DD should be shared over the overall customer base, hence possibly lowering the headline figure.
Take a look at the ebico model, who claim the savings made by ebico customers who pay by DD effectively pay for the higher costs their prepayment customers would otherwise have to pay.

The whole purpose of getting people to pay by DD is because it is cheaper for the company to administer.

Better cash flow - no 3/4 month arrears for customers paying quarterly - sending out reminder letters etc.

My point was that without a DD discount incentive more customers will choose to pay quarterly in arrears.

Cardew

MillicentBystander wrote: »

I think as long as the various discounts given have some basis in reality with regards to savings to the company then it's fine. Certainly the price difference between online deals and standard deals were impossible to justify hence the 'flattening out' we have seen recently.

I would agree with that principle, athough it is pertinent to point out that all companies are forbidden to charge pre-pay(PP) customers the additional costs of administering the PP meter accounts. A political decision on the grounds that PP customers tend to be the poorer in society.

michaels

Does it cost no money to set up and maintain an account even where it is not used?

Do the pipes to a house, meter etc not need replacing if they are not used?

Thought not, there are fixed costs so surely fairness suggests that charges should reflect this cost rather than only being levied on the amount of gas used?

Perhaps MSE and Which will start campaigning for the removal of all bulk purchase discounts as being 'unfair' to those who use less?

Can anyone imagine what will happen to overall charges if utility companies are effectively stopped from competing? Anyone trying to suggest it will cost consumers less overall?

Comparison sites make it very easy to compare tariffs however complex, the only things that make it harder are the 'switching penalties' / 'discounts' only paid every 12 months. Ban these and no other market intervention is necessary. Yes those who are not willing to spend the time to shop around will pay more but the same thing happens every time someone pays £2 for a can of coke at a convenience store rather than buying a multipack at the supermarket and taking a can with them when they go out - should we decree that every outlet charges the same for a can of coke whether you buy one or a 12 pack at the supermarket or at the airport?

MillicentBystander

Comparing a can of coke to heat and light. Hmmmm...yes, that works as a totally convincing argument.

wakeupalarm

Your being patronising MillicentBystander, why not address michaels points about the cost of maintaining pipes, meters, billing costs, etc?