Gas and electricity pricing

Alan1623

It seems to me that the best way to simplify pricing structures would be to remove standing charges and quote a single unit price for each unit consumed. This would allow easy comparisons of competitors "offers". Or is this too simple?

Andy_WSM

Alan1623 wrote: »

Or is this too simple?

The cynical side of me says this would be too simple and allow people to compare the prices of the energy companies easily - something I am sure they don't want as they'd actually have to compete with each other then...

lstar337

Possibly the better way to do it would be to strip out the cost for network fees, and make that uniform across the board. Then split unit costs and administration costs, so you can compare those more easily.

I'm sure that my plan is terrible though, and somebody on MSE who knows far more about these things will tell me why.

WestonDave

I suspect Istar's plan is nearer to realistic.

The costs which are incurred as part of the standing charge are often fixed "per property" rather than varying depending on usage. For example the supply cable doesn't wear out if you use it more, but you still need to be connected to the grid, have substations, pylons etc to enable you to be supplied. There will also to some extent be a basic cost to having your account with a particular supplier.

Would be interesting to have bills seperated into 3 sections.

1. Supplier costs for usage - XkWh @yp = £Z
2. Regional network costs - X days @ £y per day = £A
3. Taxes - 5% VAT, fixed climate levies and variable per unit climate levies.

That would firstly stop obfuscation between suppliers as the only charge they could differentiate on would be cost per unit, and it would also make it clear how much we pay to maintain a supply grid, and finally how much of our expensive energy cost is actually Government induced - especially at a time when one instigator of many of those costs is trying to pretend to be on consumers side by promising to fix prices!

There's actually nothing stopping any supplier adopting that mechanism now at least as a note to its bills (is there a standard bill format these days? - had a feeling Ofgem insists on certain things)

WestonDave

Incidentally eliminating standing charges altogether has interesting side effects - in Spain where solar is much more powerful, and standing charges weren't part of the system, they are having to work out how to charge people who are connected to the grid (for backup and very low uses) a fair rate towards maintaining the system when they generally pay very little in energy costs due to their panels and battery systems.

macman

What is not simple at present?. Comparison sites requires two things, your annual kWh consumption and your postcode. It's a 1 minute process to compare tariffs.

Ant555

I have a daily standing charge on my current EDF account.

As its shown as a 'daily standing charge' does that mean exactly what it says?

So the 14.00p daily charge for electricity is simply .14 x 365 = £51.10 per year?

lstar337

macman wrote: »

What is not simple at present?. Comparison sites requires two things, your annual kWh consumption and your postcode. It's a 1 minute process to compare tariffs.

I don't think the current system is difficult to understand, but I think it helps the Energy Co's reduce competition.

I would welcome seeing exactly what the money on my bill is paying for.

Comparison sites are not the answer to everything, they have their own agenda. And why should we even need them in the first place? I don't need a comparison site to help me put fuel in my car, I just look at the price/litre of my local garages, and decide which is the best value.

lstar337

Ant555 wrote: »

I have a daily standing charge on my current EDF account.

As its shown as a 'daily standing charge' does that mean exactly what it says?

So the 14.00p daily charge for electricity is simply .14 x 365 = £51.10 per year?

Yes. <short message>

lstar337

WestonDave wrote: »

That would firstly stop obfuscation between suppliers as the only charge they could differentiate on would be cost per unit, and it would also make it clear how much we pay to maintain a supply grid, and finally how much of our expensive energy cost is actually Government induced - especially at a time when one instigator of many of those costs is trying to pretend to be on consumers side by promising to fix prices!

Best idea yet, show exactly how much of each bill is being spent on crappy windmills.

I'm sure more people would be against them if they reallised how much they were being charged to fund them. But I guess it would defeat the point of the stealth tax.

Andy_WSM

macman wrote: »

What is not simple at present?. Comparison sites requires two things, your annual kWh consumption and your postcode. It's a 1 minute process to compare tariffs.

The comparison sites have themselves to look out for, ie they get commission for recommending people to the suppliers and this commission varies depending who the supplier is. Not exactly unbiased, is it?

If I buy petrol it's a very simple case of looking at the price per litre and driving in and filling up my car. An informed decision. If I want to compare prices for gas & electricity I have to look at the suppliers daily standing charges (they all vary) and their unit rates and do some maths based upon previous consumption (unbelievably many suppliers make these unit prices hard to see and would rather tell you a price per month), but that's not what I want, my monthly usage varies considerably. I want to know how long it costs to run a 1kW appliance for an hour, including all hidden fees, taxes and indeed the various discounts. A simple "want" really.