Fewer tariffs demanded in energy bills reform: what it means for you

wakeupalarm

Perelandra wrote: »

The "granny" referred to here will in many cases end up worse off under the new proposals- the real killer for many being the requirement for a standing charge..

So we have granny=worse off, low users=worse off, savvy internet users who seek out the best tariffs=worse off, people who collect Tesco clubcard points, etc=worse off, people who can only understand petrol forecourt priceing=worse off, elderly on social tariffs=worse off.

Besides the energy companies themselves, can anyone see any group actually gaining with these Ofgem proposals? The whole scheme just seems like a way of increasing prices for consumers and then blaming consumers for wanting less complicated tariffs.

penrhyn

Yes the high powered greenwash lobby, lots of lovely subsidies for their bird shredding, energy consuming windmills.

Richie-from-the-Boro

Money and little windy-mills.

Committee on Climate Change chief, Lord Deben, the ex-hamburger man of mad~cow~fame John Selwyn Gummer claimed in a report around xmas that generating power from natural gas would in the long run prove much more expensive than wind farms – despite the multi-billion pound subsidies wind receives from consumers and taxpayers. Tim Yeo, the Select Committee chairman, is a director of several renewable energy firms and lists just over £139,450 in payments linked to green companies in the latest MPs’ register of interests. Professor Bernie Bulkin is chairman of the DECC’s Office of Renewable Energy Development is also paid an undisclosed sum by a giant renewable energy investment fund. Prof Bulkin is a ‘senior adviser’ to Vantage Point Capital Partners, whose £3 billion holdings include large stakes in some of the world’s biggest wind, solar and biomass firms.

Now we all wonder why we're all paying through the nose for little windy-mills and other garbage initiatives, the above might just give you a slap with a clue stick.



Its 8 months since 1000 members of the public were asked to :

- select the cheapest out of six current tariffs
- then do the same from six simplified tariffs with a unit rate
- just 8% of people could identify the cheapest current tariff
- whereas 89% of people picked the cheapest simplified tariff

I was always against the GOV's & Ofgem's propsed TCR, they the big 6, and Ofgem are in it together, its just more smoke & mirrors. I'm against hidden charges and minced aggregated costs and benefits that are designed by the industry to steer the public to confusing tariffs and misleading deals. The probability that 90% of the population will (1) benefit from a flat pricing structure, (2) understand a single unit flat pricing structure and (3) select a flat price from that structure is precisely what terrifies the GOV its apparatchiks the DECC and the big 6. I had hoped my GOV would help those of us on these islands to combat the price rises, not collude in assisting their implementation.

If 90% of the UK dwellings fit into the bell curve, then 90% of the population will choose flat pricing if its offered, this clear and unambiguous price per unit that is instantly comparable. For the 5% that fall higher & the 5% that fall lower than the 90% in the bell curve .. .. tough. Second home owners and uber low users will always have options outside the big 6 - the huge majority of the UK will no longer be divided by the minority users. So a flat price per kW delivered to your door by the big 6. It really doesn't matter whether it includes a standing charge, so long as each of the big six include it. Neither does it matter if the the big 6 have no standing charge so long as all of the big six exclude it, that's what a 'flat price is. Unless we have flat pricing this debate will still be happening in another 23 years supported by GOV & Ofgem and we will still be paying for the 10% who choose to be tree huggers our divisions.

Money and little windy-mills.

Smidster

Worst case scenario all round.

Of course there should be some rules in place to prevent the energy companies from exploiting the inability of certain people to find better deals but when it means that other people are being brought into fuel poverty then what are we really gaining?

In reality the next effects here are going to be:

1) Higher prices for the majority as we start to subsidise those who were at the very top end of the pricing spectrum.

2) Much more volatile energy prices for all - One of the good things about the current system is the ability for companies to offer different term fixed deals for those wanting different levels of price security. Now this is gone.

3) The "requirement" for a standing charge is scandalous - If I don't use something why should I pay for it?

Cardew

Richie-from-the-Boro wrote: »

If 90% of the UK dwellings fit into the bell curve, then 90% of the population will choose flat pricing if its offered, this clear and unambiguous price per unit that is instantly comparable. .

That might well happen if the prices are 'clear and unambiguous'; however this will not happen with Ofgem's proposal.

Far from being 'instantly comparable' the scope for manipulating overall charges is huge where companies can give discounts for Direct Debit, Internet(DIY!) and dual fuel; as well as the amount of standing charge.

A couple of years back I was on an E-on tariff where the kWh prices were amongst the highest available, yet iirc the total discounts were around 30% and made it comfortably the cheapest.

penrhyn

Could it be that the continuing complexity is a result of lobbying from Compare the Merecat et al:-) ?

victor2

Smidster wrote: »

3) The "requirement" for a standing charge is scandalous - If I don't use something why should I pay for it?

So you'd happily have your gas or electric supply to your house ripped out if you decide not to use it for 6 months. Then pay for it to be put back should you decide you want it, or you want to sell the house for a reasonable value?

However, I do agree that the standardisation and "simplification" of tariffs will be bad news for those who are prepared and able to study exactly what it will cost them with different suppliers.
As an "average" sort of user, I am quite happy for legislation to say that tariffs must have a standing charge and single rate. However, it would mean very low users pay over the odds if you look just at what they pay per kWh.
It is far from scandalous when you attach a value to the convenience of having the utilities on tap as it were.

MillicentBystander

Smidster wrote: »

Worst case scenario all round.

Of course there should be some rules in place to prevent the energy companies from exploiting the inability of certain people to find better deals but when it means that other people are being brought into fuel poverty then what are we really gaining?

In reality the next effects here are going to be:

1) Higher prices for the majority as we start to subsidise those who were at the very top end of the pricing spectrum.

2) Much more volatile energy prices for all - One of the good things about the current system is the ability for companies to offer different term fixed deals for those wanting different levels of price security. Now this is gone.

3) The "requirement" for a standing charge is scandalous - If I don't use something why should I pay for it?

You've got this 100% the wrong way round - it's actually fairer prices for the ones who were previously ripped off so you and I could get the 'best' deal. But it was all a sham, initially exposed (amazingly) by British Gas when they decided they were no longer going to rip off their loyal standard tariff punters to (fleetingly) get to the top of the switching sites so us tariff tarts could switch yet again, incurring yet more costs for the industry. THEY subsidised us and we aren't now subsidising them because our prices were never based in reality. We contributed hugely to the parasitic industry that has mushroomed with the advent of confusion marketing (ultimately the biggest proportion of these costs we caused being paid by the standard tariff punters; a double whammy of unfairness!)

At least I am honest enough to admit it - I was a serial switcher, I did very well out of it but it was never my belief that it was actually right and proper. You (like me) had it good for a number of years but it's over now. Look back with fondness at how an awful industry contrived to get us far better deals (relatively speaking) than we were entitled to, not bitterness about it ending. It was never going to last.

Nada666

What it means for you:

very low consumption - hundreds of percent increase in bill
on a cheaper tariff - hundreds of pounds increase in bill
too lazy to switch - a saving of ten or twenty pounds off your annual bill (but you will still be too differently motivated to bother to fathom out the new system (which is NOT materially less complicated) and will still be subsidising any deals left by a significant amount)
shareholders and utility bosses - kerching
the estates of Harry Warren and Al Dubin (writers of "We're in the Money") - kerching

wakeupalarm

Nada666 wrote: »

What it means for you:

too lazy to switch - a saving of ten or twenty pounds off your annual bill (but you will still be too differently motivated to bother to fathom out the new system (which is NOT materially less complicated) and will still be subsidising any deals left by a significant amount)

This is what I don't understand about Ofgem's motivation for these changes.
The lazy are always going to be too lazy to switch. If they didn't switch before these changes when they were paying high standard rates to their regional energy suppliers who were generally the most expensive and far lower prices were on offer how are they going to be incentivised to switch now when the standard prices are going to be lower and automatically moved to the cheapest tariff and the cheaper deals are going to more expensive.

Before
Online advert from energy firm - Save £300 by switching.from your standard tariff
Lazy person- Nah, I don't think I'll bother

New proposals
Online advert from energy firm - Save £50 by switching from your standard tariff
Lazy person - But my energy company already puts me on the cheapest deal, I don' t think I'll bother for £50.

The gap between the highest and lowest tariffs was hundreds of pounds difference and it wasn't enough for 55% of the population to switch. The gap now is going to be narrower, who knows by how much, but its going to be less than before.