EDF call for flat prices and Ofgem's nonsensical response

Richie-from-the-Boro

- 1st tier 2nd tier
- 2nd home owners
- low users
- tree huggers
- dual fuel

All these options should be outlawed, a standardised single rate 'petrol forecourt' pricing model per kW for gas and a single rate per kW for electricity should be forced on the big 6 industry. Whether the difference is 2% or 12% is irrelevant, 99% of us sitting at home will know at a glance that one is charging 10% more per kW delivered to my door than the other. Suddenly and finally the camouflage is removed from pricing, no spreadsheets required, in fact not even a Microsoft calculator will be needed.

The secondary resellers will still cater for those who have specific wants & needs, and households with 'niche' needs can switch and pay their rate if that's what their needs dictate. 99% of the UK however will simply choose to click the cheapest kW delivered to their meter. Naval gazing by the UK-GOV for 30 years brought us to this point, the 'do nothing and hope' strategy clearly has not worked yet we continue to 'do nothing and hope' that windy-mills and other non fossil megga expensive garbage renewable options will miraculously be able to deliver cheap cost energy. Unless we force a level playing field on the big 6 by legislation nothing will change, nothing at all.

libra10

Well said richie from the boro.

Couldn't have put it better myself

The sooner the better!

davidgmmafan

"Discounts can make tariffs far more complicated to understand than two tier or daily charge"

But we already have two tier tariff, or a daily standing charge, AND discounts apart from suppliers like Ebico

I also don't understand the objection to direct discounts and such. I would wager they are cheaper for companies as people tend to pay (on average) more reliably on these schemes.

I know people will moan about being penalized for not being on direct debit, but if what I have suggested above is true (direct debit IS cheaper for companies and reduces bad debt) then the alternative is that as a direct debit customer would then be subsidizing those who don't pay this way.

There are no easy answers, well apart from the whole petrol forecourt example, but permitting discounts for payment methods. I really don't think it would be that complicated.

Cardew

davidgmmafan wrote: »

"Discounts can make tariffs far more complicated to understand than two tier or daily charge"

But we already have two tier tariff, or a daily standing charge, AND discounts apart from suppliers like Ebico

I also don't understand the objection to direct discounts and such. I would wager they are cheaper for companies as people tend to pay (on average) more reliably on these schemes.

I know people will moan about being penalized for not being on direct debit, but if what I have suggested above is true (direct debit IS cheaper for companies and reduces bad debt) then the alternative is that as a direct debit customer would then be subsidizing those who don't pay this way.

There are no easy answers, well apart from the whole petrol forecourt example, but permitting discounts for payment methods. I really don't think it would be that complicated.

The whole thrust of the proposal was apparently to make all tariffs easy for everyone to understand - the 'petrol forecourt' example.

I have no objection to discounts, however I was making the point that discounts have the potential to make understanding which is the best tariff really complicated.

Take your example of a direct debit discount.

A. One company can offer a fixed sum per day.

B. Another a reduction per kWh up to a maximum sum.

C. Another a smaller reduction per kWh with no maximum sum.

Examples A, B & C, will suit different customers. You need to know your consumption in kWh to work out which is best for any individual.

The same permutations could be offered for dual fuel discount, loyalty discounts etc.

Richie-from-the-Boro

The suggestion was a contract offered by each of the big six that simply says they require (1) no standing charge (2) e-account (3) meter reads and a (4) unit cost for for gas, and one for (6) electricity in return for which they will offer a flat price of £x per unit for gas and a flat price of £x per unit for electricity. No other discounts, loyalty bonus etc, no exceptions whatsoever, 'petrol forecourt' only. If anyone wants a variation let them re-enter the world of smoke & mirrors and choose a different 'non flat' non 'petrol forecourt' only tariff.

Householders would be able to choose at a glance which of the big 6 was cheapest, lets not kid ourselves cross accounting, aggregation subsidies, transport and all other supplier inputs would already be built into the price of the 'petrol forecourt' model anyway. The difference this time is true price comparison between the big 6 would be instantly visible, and choice and competition would return to the market.

The GOV are already hiding an enormous 'green' cost in our leccy bills, DECC estimate GOV 'green' & climate change costs levied by energy suppliers will bump our leccy bills up another 27% in the next 6 or so years. Get a grip now lets have flat transparent prices.

JSR

How about a compromise?

The standard tariff must be a fully dumbed down tariff, a flat rate with no discounts, no loyalty incentives - nothing. Perfect for people too lazy to type their usage into a comparison calculator. You can even make them put a forecourt sign on the front page of their website showing the price.

But energy companies remain free to offer other tariffs to more engaged customers who want a tariff tailored to their particular usage, billing and generation requirements.

Everybody's happy now, right?

libra10

Sounds good to me JSR

MillicentBystander

We have a winner!

insanegloss

So then what of the governments plan to 'force' suppliers to give the cheapest tariff as standard? What would be the point then of having the other things such as dual fuel, dd and all the other stuff?

Just a thought...

nzmegs

EDF are never going to do this until other suppliers do the same - just hollow words and they are aware of that. Something tells me that just wanted to boost their image.

The real problem is a lack of competition which should be partially alleviated by the latest plan to allow resale at fair prices and under fairer conditions to smaller suppliers. Although there is a good chance that the big six will simply fix the price between them anyway and offer little incentive for smaller suppliers to enter the food chain.