Economy 7 Tariffs

Singbe

I have been a user of Economy 7 electricity for 25 years. When I first installed E7, the unit KWh price was almost a quarter of the standard KWh day tariff. In Dec 2013, my supplier (First Utility) increased their E7 tariff by an unprecedented 34% (in comparison to a day rate tariff increase of 14%). Despite their assurances the rise was an "average increase of 6 to 9%", I still have the copy letter from their CEO to support my own calculated percentages. I have since changed supplier, but comparison-sites appear to confirm that all energy companies now have an Economy 7 tariff that is, at best, only half the KWh unit cost of the day tariff. Indeed, the differential between standard day, and Economy 7, tariffs offered by some Energy Suppliers, has narrowed considerably. Is there an agenda by Energy Companies to either, phase out Economy tariffs, or maximise their profits from E7 customers? I would be interested in other energy user's views.

HappyMJ

Singbe wrote: »

I have been a user of Economy 7 electricity for 25 years. When I first installed E7, the unit KWh price was almost a quarter of the standard KWh day tariff. In Dec 2013, my supplier (First Utility) increased their E7 tariff by an unprecedented 34% (in comparison to a day rate tariff increase of 14%). Despite their assurances the rise was an "average increase of 6 to 9%", I still have the copy letter from their CEO to support my own calculated percentages. I have since changed supplier, but comparison-sites appear to confirm that all energy companies now have an Economy 7 tariff that is, at best, only half the KWh unit cost of the day tariff. Indeed, the differential between standard day, and Economy 7, tariffs offered by some Energy Suppliers, has narrowed considerably. Is there an agenda by Energy Companies to either, phase out Economy tariffs, or maximise their profits from E7 customers? I would be interested in other energy user's views.

No agenda, no extra profit from E7 customers.

[Deleted User]

First Utility still comes up as cheapest eco 7( S.Yorks area ) with Sainsburys Energy next for high night rate users.These are one year fixes.Maybe F.U quoted you their standard tariff.Sainsburys were the ones to go for the night storage users who will use much more at night.Their night rate was only 4.7 p /kwhr, day was 13.5 ( inc vat )

Singbe

HappyMJ wrote: »

No agenda, no extra profit from E7 customers.

Thanks HappyMJ, but why have (substantially) different percentage increases for day and night rates, and what justifies narrowing these differentials?

footyguy

25 years ago, E7 rates for this property was about 7p daytime and 2.5p low rate, with a daily standing charge of about 9p

25 years ago this house was valued at about £75k; today it is valued at about £300k

So perhaps we should be paying 28p day rate, 10p low rate and 36p per day?

(We are paying 12p day rate, 6.5p low rate and 15p per day)


Edit: You can't really compare prices like this nowadays since the opening up of the marketplace, and the varying standing charges that suppliers are allowed to make.

e.g. I've seen one tariff for this region where day rate was about 9p and low rate about 7p, but I've also seen tariffs for this where day rate was about 22p and low rate 7.5p. Standing charge can range from 0p to almost 50p per day.

HappyMJ

Singbe wrote: »

Thanks HappyMJ, but why have (substantially) different percentage increases for day and night rates, and what justifies narrowing these differentials?

There's less of a need to encourage night usage any more. 25 years ago coal fired power stations were more numerous and they run 24/7 at full power. There was too much supply and not enough demand at night. These days we have less coal power stations and more gas fired power stations. Gas can be powered up and down as the day progresses so they don't run full power all night.

Hydro stations can also be set in reverse purchasing electricity on the market at low rates at night pumping water from a low level reservoir back to a high level reservoir ready for the next day when they can generate electricity and sell it at a higher rate.

Technology's moved on...the more demand there is for night electricity the more expensive it becomes. The more supply there is the cheaper it becomes. Reduce the supply and the price goes up.

[Deleted User]

HappyMJ wrote: »

There's less of a need to encourage night usage any more. 25 years ago coal fired power stations were more numerous and they run 24/7 at full power. There was too much supply and not enough demand at night. These days we have less coal power stations and more gas fired power stations. Gas can be powered up and down as the day progresses so they don't run full power all night.

Hydro stations can also be set in reverse purchasing electricity on the market at low rates at night pumping water from a low level reservoir back to a high level reservoir ready for the next day when they can generate electricity and sell it at a higher rate.

Technology's moved on...the more demand there is for night electricity the more expensive it becomes. The more supply there is the cheaper it becomes. Reduce the supply and the price goes up.

Night storage users are still in use throughout the UK and I have nt seen the night rate as cheap as it is now for years.A few months ago Sainsburys Energy were doing night rate at only 3.5p/kwhr, at moment they are still very cheap at 4.7p/kwhr. Many towns throughout the UK especially ones near big power stations, routinely had eco 7 meters fitted even tho they had gas central heating, Worksop Retford , Mansfield etc

Singbe

Some very valid points, but it does seem to confirm that E7 price increases are as a result of manipulating the supply curve (supplier led), rather than demand led!

Richie-from-the-Boro

Singbe wrote: »

Some very valid points, but it does seem to confirm that E7 price increases are as a result of manipulating the supply curve (supplier led), rather than demand led!

Huge opportunities were offered for TOU with GOV backed weight behind them, companies did costly R&D in anticipation of 'smart metering' led night storage. Smart meters went into the long grass along with the anticipated truly flexible smart use TOU's. The original coal [can't switch em off] delivery was white metered 18 hours a day under the old regional boards, it was only nibbled down to 7 hours when Maggie did the hissing Sid and others and the privates saw an opening to chop half the delivery hours.

Cardew

The cheapest dual fuel for me is First Utility(FU) fixed to 31/12/2016.


This applies for an Economy 7 tariff with my usage of off peak 25% or a non-economy 7 tariff.


FU electricity prices for my area(Midlands) on a non-economy 7 tariff are 10.722p/kWh and a daily charge of 21.47p.


On their Economy 7 tariff their prices are 9.829p/kWh and 7.482p/kWh with a daily charge of 19.90p


Note: gas prices are the same for both electricity tariffs at 2.748p/kWh and 21.47p daily. All above prices include VAT.


So we have the unusual situation where their 24/7 rate is considerably more expensive(9%) than the daily 'peak' rate on their Economy 7 tariff.


Admittedly their off-peak rate of 7.482p/kWh is poor. However for those of us on dual fuel with a E7 meter, and thus low off-peak usage, it is a no brainer to have their Economy 7 tariff.*


* It is only the horror stories that I hear about FU's billing service that deters me.