MSE News: Explain your prices, Ofgem tells big six energy giants

Consumerist

Energy companies tell us they want to rebuild trust and that the energy market is competitive. If this is true, they need to put their words into action. One of the most important things they can do is to be clear on their prices.

The energy companies will tell Ofgem whatever they think Ofgem wants to hear. The appalling failure of Ofgem is that it believes what it hears from the energy companies while they are laughing at Ofgem and their customers all the way to the bank.

Ofgem is wholly ineffective for the consumer and the sooner they are replaced by a regulator who will actually regulate, the better.

Uxb

Meanwhile this study by the EIA suggests existing prices need to go MUCH higher to pay for the replacement infrastructure required due to expiring lifetimes of existing kit.
As reported in the DT

http://www.telegraph.co.uk/finance/newsbysector/energy/10873477/Europe-at-risk-of-blackouts-warns-IEA.html
Quote extract
“Wholesale power prices are 20pc below recovery costs so there is no appetite to invest. Europe needs to look at the design of its energy market very closely,” he said.

Bluebirdman_of_Alcathays

minislim wrote: »

the big six are clearly up to something.
as whenever i do a price comparison of all the energy companies none of them ever are at the top of the lists.

the regulator and government needs to something about them. and soon.

http://www.uswitch.com/gas-electricity/guides/switching-small-energy-supplier/

Read this, educate yourself about why the big 6 will never appear at the top of your comparisons.

Why not smash an extra 100 quid on your shopping bill if you darken the door of a big 4 supermarket?

Or pay extra for your toothpaste if it happens to be made by Unilever or Procter & Gamble?

People are being hammered by the state for exercising free choice. It's high time the playing field was leveled.

Trix3y

Ofgem is completely useless and in the back pockets of the big six.If they had any integrity or backbone the situation with the energy market would have been resolved years ago. What is the point of asking the big six to explain themselves? they will simply come up with some fairy story which Ofgem will accept. I believe Ofgem is staffed by ex employees of the big six so how can they be independent .Government need to stop talking and take some action and get a regulator who represents the consumer not the provider. It is sites like this and Which who have driven change.:mad:

Bluebirdman_of_Alcathays

Trix3y wrote: »

Ofgem is completely useless and in the back pockets of the big six.If they had any integrity or backbone the situation with the energy market would have been resolved years ago. What is the point of asking the big six to explain themselves? they will simply come up with some fairy story which Ofgem will accept. I believe Ofgem is staffed by ex employees of the big six so how can they be independent .Government need to stop talking and take some action and get a regulator who represents the consumer not the provider. It is sites like this and Which who have driven change.:mad:

Government make smaller suppliers pay less tax than the big 6. They could level the playing field, that might be a start.

Consumerist

Bluebirdman_of_Alcathays wrote: »

Government make smaller suppliers pay less tax than the big 6. They could level the playing field, that might be a start.

Well, of course, the government has already done that. When they reduced green taxes in energy bills, it was to the advantage of the big six because the smaller suppliers don't pay green taxes anyway.

Bluebirdman_of_Alcathays

Consumerist wrote: »

Well, of course, the government has already done that. When they reduced green taxes in energy bills, it was to the advantage of the big six because the smaller suppliers don't pay green taxes anyway.

Key word reduced. The big 6 still have to pay ECO and WHD. Remove these unfair levies, and the vast majority of the population would get a better deal.

http://www.bbc.co.uk/news/business-24741541

Consumerist

Bluebirdman_of_Alcathays wrote: »

. . . Remove these unfair levies, and the vast majority of the population would get a better deal.

It is not surprising that the big six want to stifle competition from the smaller suppliers.

It does highlight the abject failure of the big six to take advantage of the economies of scale which they should have due to their size. The suspicion, of course, is that they are making economies of scale but they are hiding them so they don't have to pass them on to the consumer. The shareholders, however, do very nicely and I suspect that is your primary interest.

Bluebirdman_of_Alcathays

Consumerist wrote: »

It is not surprising that the big six want to stifle competition from the smaller suppliers.

It does highlight the abject failure of the big six to take advantage of the economies of scale which they should have due to their size. The suspicion, of course, is that they are making economies of scale but they are hiding them so they don't have to pass them on to the consumer. The shareholders, however, do very nicely and I suspect that is your primary interest.

My primary interest is seeing the people of this country receiving lower prices (admittedly we do rather well on energy prices compared to our European neighbours).

The economies of scale in the energy industry won't be particularly significant - everybody is selling the same product. The only differential is the billing procedure - it's hardly the same as Honda vs TVR.

The majority of people in this country choose to be with the big 6 - if the government are real about lowering bills, perhaps they could take a look at the taxes they're foisting on us.

Consumerist

The best way to lower prices is to increase competition.

It is because they are all selling the same product that the economies of scale should be visible. The bigger suppliers should be able to administer customer accounts at a fraction of the per capita cost of the smaller companies.

I'm not sure that the vast majority of people in this country "choose" to be with the big six but I accept that they are so disengaged from the energy market that haven't chosen to move from those suppliers to whom they were handed on a plate by government. Those "sticky" customers have not been won by the big six but were bought as part of the purchase price.