Energy market - new standards of conduct

Nada666

Consumerist wrote: »

If a charge is pro rata to consumption, I don't quite understand how it can be a "standing" charge. It's a contradiction of terms.

Edit
From the RMR para 2.13:-

While our policy requires suppliers to adopt a standing charge and unit rate structure, we do not specify the level of standing charge and consequently any standing charge can be zero.

Hope that clarifies the position.

Uh, hence my use of quotation marks. The point you are missing and not clarifying is that where the standing charge is set to zero the resulting stand alone price is not a tier 2 price it is a tier 1 price that includes a contribution to standing charges on each and every kWh used. And the problem with that is that you do not have the flexibility to bang on the heating or up your usage - the tier 1 "gouge" will now not be capped at the SC tariff rate.

Consumerist

Nada666 wrote: »

Uh, hence my use of quotation marks. The point you are missing and not clarifying is that where the standing charge is set to zero the resulting stand alone price is not a tier 2 price it is a tier 1 price that includes a contribution to standing charges on each and every kWh used. And the problem with that is that you do not have the flexibility to bang on the heating or up your usage - the tier 1 "gouge" will now not be capped at the SC tariff rate.

The two tier system was only a means of making a standing charge (normally on first units consumed each month) without calling it a standing charge (a la Ryanair). That practice has now been stopped.

It has to be said that only a few, who have properties standing empty for much of the year, will lose out here. For the vast majority, however, the new structure will be simpler to understand, in my view.

Cardew

Consumerist wrote: »

Exactly what, exactly?

My point is that these shenanigans will now have to stop.

You asked 'how can a tariff be fixed but not fixed?

The post was explaining(to all readers of the thread) how some 'fixed' tarifs WERE operating. The Utility companies called them 'fixed' along with genuine fixed tariffs where the charges remained the same for the period of the tariff.

Obviously this must now stop!

Consumerist

Cardew wrote: »

You asked 'how can a tariff be fixed but not fixed?

I didn't ask it and the question was answered, anyway, further on. But I take your point.

Cardew

Consumerist wrote: »

The two tier system was only a means of making a standing charge (normally on first units consumed each month) without calling it a standing charge (a la Ryanair). That practice has now been stopped.

It has to be said that only a few, who have properties standing empty for much of the year, will lose out here. For the vast majority, however, the new structure will be simpler to understand, in my view.

Agree with your first paragraph.

The new structure might be simpler to understand, but certainly not simpler to calculate which tariff is best(i.e. cheaper) for an individual.

Without a detailed breakdown(not just annual) of kWh consumption it will be impossible to work out - and bear in mind many people have no idea about 'killerwhots'.

I have heavy consumption. It might well be better for me to have a high standing charge and low kWh charge tariff for the winter months and change tariff to a low standing charge and higher kWh charge for the summer months. Especially so if 'inducements' are being offered for a change of Utility company.

Consumerist

Cardew wrote: »

. . . The new structure might be simpler to understand, but certainly not simpler to calculate which tariff is best(i.e. cheaper) for an individual. . .

I think it will be easier to compare between tariffs and suppliers merely because all tariffs should have the same basic structure. You will no longer have to compare two-tier tariffs with single-tier tariffs and standing charge because all tariffs will be of the latter type.

The actual calculations will be no easier nor more complicated than at present and these will still be done for you by comparison sites based on annual consumption.

Switching in spring and autumn has always been an option for those on variable tariffs and that will not change. The question is - will the prices for variable tariffs make it worth your while. It is, however, food for thought.

Nada666

Consumerist wrote: »

It has to be said that only a few, who have properties standing empty for much of the year, will lose out here.

They are totally unaffected and will not lose out by one single penny. They can move to a tariff that only charges tier 1 prices and can continue to pay zero pounds per year.

Primarily the only customers affected are those who live in energy efficient homes and who are poor and so can not justify the expense of putting on their heating for months on end for a small delta in comfort. They face seventy to one hundred and fifty percent increases in their bills and more. They alone will now have to subsidise the empty properties you mention. Instead of having the choice of different tariffs from every supplier they will now be limited to two or three tariffs in total.

Paying 20p or 25p for a kWh of gas might be a laugh to you but it isn't for those affected.

Nada666

Consumerist wrote: »

I think it will be easier to compare between tariffs and suppliers merely because all tariffs should have the same basic structure. You will no longer have to compare two-tier tariffs with single-tier tariffs and standing charge because all tariffs will be of the latter type.

The actual calculations will be no easier nor more complicated than at present and these will still be done for you by comparison sites based on annual consumption.

Exactlybloodycisely. Contradict yourself, much? So Ofgem c/sh-ould have advocated one standardised two-tier tariff with the same boundaries. But it's only the poor who are affected so who cares.

Consumerist

Nada666 wrote: »

They are totally unaffected and will not lose out by one single penny. They can move to a tariff that only charges tier 1 prices and can continue to pay zero pounds per year.

I don't think there will be many to choose from. Suppliers always charged a standing charge but some chose to hide it in a two-tier system.

Primarily the only customers affected are those who live in energy efficient homes and who are poor and so can not justify the expense of putting on their heating for months on end for a small delta in comfort. They face seventy to one hundred and fifty percent increases in their bills and more. They alone will now have to subsidise the empty properties you mention. Instead of having the choice of different tariffs from every supplier they will now be limited to two or three tariffs in total.
Paying 20p or 25p for a kWh of gas might be a laugh to you but it isn't for those affected.

I don't quite understand how the changes which are being introduced will put prices up any more for the energy-efficient or poor than for anyone else. Please explain.

ValHaller

Nada666 wrote: »

Uh, hence my use of quotation marks. The point you are missing and not clarifying is that where the standing charge is set to zero the resulting stand alone price is not a tier 2 price it is a tier 1 price that includes a contribution to standing charges on each and every kWh used. And the problem with that is that you do not have the flexibility to bang on the heating or up your usage - the tier 1 "gouge" will now not be capped at the SC tariff rate.

This is precisely the problem which a non zero standing charge resolves.

Tier 1 and tier 2 pricing which you seem to want actually makes the mathematics of comparing tariffs horrendously difficult when suppliers are free to set their own breakpoints between tier 1 and tier 2. When you add antics such as nPower's sculpting of the tier boundaries for gas, the utilities were empowered to bamboozle consumers at will. At least with a standing charge as a single unit rate, there is some transparency to pricing.