Ofgem's cunning plan to make things simpler

Nada666

Bark01 wrote: »

Only discounts allowed are:

Payment type - This must be built into either the standing charge or unit rate.

Dual Fuel - Must be split equally between fuels and be a £ per year amount accrued daily

Online Discount- Must be a £ per year discount accrued daily

Paperless and online could be viewed as the same thing, so I think it is still allowed.

Are you (rather, they ) having a laugh?

Being naive I assumed they wanted tariffs to be presented thusly:

NastyCo Standard Tariff
Basic Price
Gas: £65, 4.5p per kWh
Ele: £65, 14.5p per kWh
Discounts
Direct debit: £54 gas, £30 electricity per year
Dual fuel: £10 per year
Online account: £24 per year

Fair enough, won't go into the SC issue here.

Instead of that you are seriously suggesting that the tariff summary will have to be presented:

NastyCo Standard Tariff
Paying quarterly on receipt of bill
Gas only: 17.85p, 4.5p per kWh
Ele only: 17.85p, 14.5p per kWh
G and E, G: 15.15p, 4.5p per kWh
G and E, E: 15.15p, 14.5p per kWh
Paying quarterly online
Gas only: 14.55p, 4.5p per kWh
Ele only: 14.55p, 14.5p per kWh
G and E, G: 11.85p, 4.5p per kWh
G and E, E: 11.85p, 14.5p per kWh
Paying by direct debit receiving paper bill
Gas only: 3.56p, 4.5p per kWh
Ele only: 9.65p, 14.5p per kWh
G and E, G: 2.17p, 4.5p per kWh
G and E, E: 8.25p, 14.5p per kWh
Paying by direct debit online (I gave up doing the sums about here)
Gas only: 0p, 4.5p per kWh
Ele only: 2.5p, 14.5p per kWh
G and E, G: 0p, 4.5p per kWh
G and E, E: 1p, 14.5p per kWh
(give up working out combinations I've missed)

And that is for a single tariff - other tariff may use a discount per kWh on the unit price for direct debits. And actual figures will be to three decimal places.

This makes it easier for consumers to pick the correct tariff??????

Can Ofgem really be planning this?

Cardew

It is now impossible (even for us Nerds) to know which is the cheapest tariff for ourselves without knowing exactly our kWh consumption.

I posted this a few days ago:

You are quite correct that with the tier charging system it generally didn't matter as long as you consumed the tier 1 allocation - usually 500kWh or 900kWh electricity and 2,800kWh or 4572kWh gas.

However that tier 1 allocation was calculated pro-rata on a daily basis. Many on MSE reported for the two summer quarters they turned off their gas completely and paid nothing for gas in
those 6 months.

The situation now with a daily standing charge(DSC) is much more complicated IMO. This is because of the huge variation in the DSC which can vary from 10p a day to 45p a day and also the discount structure.


Whilst a DSC tariff might be easier to understand, it is impossible to know which is the cheapest tariff without knowing exactly your annual consumption in kWh.

e.g. which is cheaper pay 10p DSC and 4.923p/kWh or 45p DSC
and 4.07p/kWh?

The answer is that the 'break-even' point is 15,000kWh pa.

So below an annual consumption of 15,000kWh opt for the lower DSC.

However the varying discounts offered on the various tariffs can further complicate matters and alter the 'break-even' point.

Obviously this can all be calculated by a comparison website - provided you know your annual consumption in kWh. However those who were baffled by the Tier structure, and needed simplified tariffs, are probably unable to work out how to convert gas units to kWh and determine annual consumption in kWh.

Will it be cheaper in some cases to get gas and electricity from different suppliers? e.g. high electricity consumption and low gas consumption.

However some suppliers would not supply gas only on certain tariffs; is that practice banned?

daveyjp

You also need to check the figures the comparison site give for your estimated payment.

I know my estimated useage, but the online sites don't include all the discounts so the modest savings appear higher than they actually are.

Bark01

The way you've written that out is deliberately obtuse. I can’t even figure out the pricing structure you are suggesting, it might be correct, but is deliberately over complex.

You can make it look as difficult as you want but Ofgem have strict guidelines for how tariffs can be presented to customers, the Tariff Information Label comes into play in March 2014 and standardises the way all suppliers have to show prices

Lets take BG standard Tariff and presume they offer an online discount of £10 (I'm not sure if they still do but it adds all the levels of complexity)

The only variations per region and meter are as follows: (I've taken Eastern as its top of their rate card)

Standing Charge per fuel – 24.77

Electricity unit rate
DD – 12.13
CC or PPM – 13.02

Gas unit rate
DD – 4.51
CC or PPM– 4.81

If you are DF add a £15 discount
If you are Online add a £10 discount

Pretty dam simple if you ask me.

If you have a TOU meter add one extra set of Electrcity unit rates.