Energy market - new standards of conduct

MillicentBystander

Surely if the industry was genuinely interested in competition and transparency they would all simply set the standing charge to zero?

Consumerist

MillicentBystander wrote: »

Surely if the industry was genuinely interested in competition and transparency they would all simply set the standing charge to zero?

If the industry was genuinely interested in transparency, there would have been no need for the Retail Market Review in the first place.

It's no panacea but it's a start and heading in the right direction, in my view. What I like about it is the underlying requirement for suppliers to "treat customers fairly" and it will be interesting to see how Ofgem actually uses its enforcement powers to this end.

Nada666

ValHaller wrote: »

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

No it doesn't.

ValHaller wrote: »

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.

I have never argued that the boundaries for all two-tier tariffs should not be standardised. Say 2 units per day and 7 units per day.

ValHaller wrote: »

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.

npower are already managing to mess around with the new system - their headline prices now include the direct debit discounts wrapped up in their prices - they state an 8 pence per day standing charge when the actual standing charge is 23 pence per day.

And the variance in standing charge makes things no simpler. From less than £60 to more than £180 dual fuel - and that's just in one supplier. Plus when that is quoted as pence per day - how is that any more transparent or easy to caclulate? It is perfectly possible to ask that two-tier tariffs quote a daily standing charge equivalent if there are those who want that information.

Cardew

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.

Nobody is defending the tier system as far as I can see, and the standing charge/single kWh price is easier to understand.

However as said earlier, it is essential to know your future consumption in kWh to work out the cheapest tariff.

e.g. Which is the cheapest tariff?

1. A daily standing charge(dsc) of 35.65p and 10.956p/kWh

or

2. A dsc of 22.35p and 11.967p/kWh

Now thee and me, and most others reading this thread, can work out that if you use less than 4,800kWh pa chose option 2 if more chose option 1.

However, that isn't necessarily the case as the Utility companies are still allowed to offer discounts, so that is another factor to take into account. A different discount structure might make the 'break-even point, say 5,500kWh pa or 4,200kWh pa!

You are correct that given the annual kWh consumption the comparison websites will work out the cheapest tariff, but then that is what they did with the Tier system - so what has changed?

Bearing in mind that the aim of these changes was to simplify the tariff structures, I cannot see that it has succeded!

Thee and me etc will have no difficulty, but then neither did the Tier system hold any terrors. Those who simply don't know their 'killerwhots' are no better off.

Consumerist

Cardew wrote: »

Nobody is defending the tier system as far as I can see, and the standing charge/single kWh price is easier to understand.

For me, it's not a question of defending one system or another, it's more a case of advocating the idea of a single system applied across the board.

A standing charge was effectively built into the two-tier system anyway, so it seems reasonable to me that under the RMR suppliers will now be required to declare it up front. Most people are familiar with a standing charge, e.g. telephone bills, so that seems the easier for customers to understand.

Nada666

So standardise on a two-tier tariff. And quote the equivalent standing charge.

Instead, to make it "easier" for you to understand we will double your bills. Thanks, Consumerist, very consumer-friendly of you.

Consumerist

Nada666 wrote: »

So standardise on a two-tier tariff. And quote the equivalent standing charge.

Instead, to make it "easier" for you to understand we will double your bills. Thanks, Consumerist, very consumer-friendly of you.

Please explain why bills will double.

Nada666

[STRIKE]If you are this unaware then perhaps you shouldn't be commenting on the issue.[/STRIKE] Current tier 1 prices available to customers with a low usage typically 7p or 8p per kWh. Whack a standing charge of £135 per year on top of the tier 2 price that's an extra 13.5p per kWh over 1000 kWh. 13.5p + 4.5p > 2 x 8p.

Consumerist

Nada666 wrote: »

[STRIKE]If you are this unaware then perhaps you shouldn't be commenting on the issue.[/STRIKE] Current tier 1 prices available to customers with a low usage typically 7p or 8p per kWh. Whack a standing charge of £135 per year on top of the tier 2 price that's an extra 13.5p per kWh over 1000 kWh. 13.5p + 4.5p > 2 x 8p.

Hang on a minute.

Are you discussing gas prices? How many people use only 1,000 kWh per year of gas?

Are we talking about those "poor" multiple-property owners whose properties stand empty for most of the year?

Nada666

No, of course not. As already stated they are unaffected. I am talking about people who live in insulated properties who can not justify the cost of switching on the heating to just bump the temperature up by a few degrees. People with gas combi-boilers who use gas for cooking and hot water.