MSE News: Scottish Power cuts bills by £54 6 January 2014 at 7:04PM in Energy 40 replies 4K views

Former_MSE_Helen

"Over two million Scottish Power customers will see their bills fall from 31 January, following Government intervention..."

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Scottish Power cuts bills by £54




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Consumerist

"Npower and Scottish and Southern Energy need to pull their fingers out and implement the reductions, the money the government has released should be in our pockets not theirs."

Interesting that npower never fails to disappoint.

canterswest

Consumerist, I thought you might be interested Scottish Power was my supplier! Thank you for your reply about tariffs being in line already so I don't need to go through comparison again.


The article needs some numbers. We need to know


1 How many customers will receive a £54 cut. I suspect and hope it will be millions and some credit should go to the government for achieving this.


2. How many customers will miss out because they are on a long term fix, like I was on. I suspect this is a very very small number by comparison. These tariffs are like loss leaders. Only a tiny proportion will actually be on them is my guess.


I am pleased if the government has managed a reduction for millions and I don't mind to be honest that those already paying less now have slightly less advantage.


The article is so parti pris.


(Sorry article says 2 million saving from standard tariff cut - we just need to know numbers on loss leader tariffs so there is some balance to the article)

Nada666

canterswest wrote: »

1 How many customers will receive a £54 cut. I suspect and hope it will be millions and some credit should go to the government for achieving this.

£12 a flat discount for everyone (on qualifying tariffs) but the other £32 (or more or less) is pro rata consumption.

canterswest wrote: »

2. How many customers will miss out because they are on a long term fix, like I was on. I suspect this is a very very small number by comparison. These tariffs are like loss leaders. Only a tiny proportion will actually be on them is my guess

Casual glance only those on a long term fix will receive it - those on 2014, 2015 fixes are not receiving them. As far as I can see Scottish Power are only giving the reduction to those on the 2017 fix.

neneromanova

Oh wow...£54...what ever will I do with and extra £4.50 a month?

NittyGritty

its better than nothing. every little helps nowadays

canterswest

Exactly. I am still waiting for the figure on how many Scottish Power accounts this website has to switch to long term fixed tariffs. It is no good saying a lot more can be saved using this website without saying how many accounts it has to swtich. This website will have a quota as it has a commercial relationship with energy providers. It will be a lot less than the 2 million getting the discount from government changes is my guess.

markbernstein

Fixed electricity customers will get the £12 rebate, but the majority [of customers on fixed tariffs] won't benefit from the £42/year reduction. Scottish Power says this is because at present, 97% of its customers on a fixed deal already pay less than its new standard tariff prices. It adds these customers were protected from the rising cost of green levies as they were not hit by the firm's 8.5% average gas hike and 9% average electricity hike that came into force last month.

Perhaps I'm missing something as I'm not familiar with the intricacies of the energy markets, but this argument makes no logical sense to me.

Surely the old "green levies" were priced into the fixed tariffs of last year, before the deal with the government was struck to reduce them? So if Scottish Power now doesn't have to pay the levies as expected when it offered the fixed tariffs, and if it doesn't pass all the reductions on to all its customers, Scottish Power is simply pocketing for itself the reduction in the Energy Company Obligation compared to what it thought (at the time when it created the fixed tariffs) it would have to pay to the government (on behalf of its customers on fixed tarriffs), isn't it? And that is most clearly not what the government said would happen.

All of the major energy suppliers have confirmed that they will pass the benefits of this package to their customers. (DECC press release, 2 December 2013)

Can someone with a better knowledge of the ins and outs of this business please explain to me if there's any value at all in Scottish Power's argument quoted at the top?

alinwales

..but the savings will just trim both firms' winter price
hikes..

24 March is in Spring not in Winter, so no reduction to anyone this winter. If one supplier can immediately cut their rates, does it seem cynical to think that the companies who do not are simply thickening the lining in their pockets for a few more weeks at the coldest time of the year?

(should say that I refer to SSE plans here, not scottish power)

Cardew

markbernstein wrote: »

Perhaps I'm missing something as I'm not familiar with the intricacies of the energy markets, but this argument makes no logical sense to me.

Surely the old "green levies" were priced into the fixed tariffs of last year, before the deal with the government was struck to reduce them? So if Scottish Power now doesn't have to pay the levies as expected when it offered the fixed tariffs, and if it doesn't pass all the reductions on to all its customers, Scottish Power is simply pocketing for itself the reduction in the Energy Company Obligation compared to what it thought (at the time when it created the fixed tariffs) it would have to pay to the government (on behalf of its customers on fixed tarriffs), isn't it? And that is most clearly not what the government said would happen.

Can someone with a better knowledge of the ins and outs of this business please explain to me if there's any value at all in Scottish Power's argument quoted at the top?

Exactly - I posted the same on another thread.


Their business plan priced their fixed tariffs at xxxx which took into account they would be paying £yyyy in 'green levies'.


The Government have, in effect, refunded Scottish Power £54pa for all customers. However SP have decided to keep £42 of that refund on the grounds:

Scottish Power says this is because at present, 97% of its customers on a fixed deal already pay less than its new standard tariff prices. It adds these customers were protected from the rising cost of green levies as they were not hit by the firm's 8.5% average gas hike and 9% average electricity hike that came into force last month.

LesU

The only other explanation for SP's approach to refunds is that people on fixed tariffs (like myself) were being subsidised by the customers on standard variable tariffs. So logically, if SP aren't giving refunds back to the fixed rate customers, they should be giving back more to the standard rate customers.
Otherwise, as has been said, SP have just been given a nice Christmas present by the government (aka you and I as taxpayers).
If I was a standard variable rate customer I would be asking where the rest of the money has gone.

Just out of interest, has anybody seen any numbers regarding the proportion of SP's customers on fixed rates?