F&W News : Brexit vote pushing up household energy bills, claim experts

fredandwilma

JJ_Egan wrote: »

Yes thank you a much debated topic of a few years back .Price rises and how much extra you pay to be locked in .

Funny, i don't see it as being locked in. I'm prepared to switch at anytime, indeed, I've registered for several forthcoming collectives. I'm sure many people who view MSE are paying extra to be "locked" in, as you put it, on all these fixed tariffs.


I take it you are not on a "locked" in tariff? I assume you must therefore be on some sort of standard tariff and you're not any fixed rate tariff or tariffs from the CEC or collectives?

May I ask what tariff and what unit and sc rates you are on? as i have given you the information you requested.

It will be interesting to compare and maybe i can switch to your tariff / supplier.

Like i said, the tariff I'm currently on is around £200 pa cheaper than the first "cheapest" option offered by the CEC, so how can i be paying extra?

JJ_Egan

Basically the majority of contracts that where fixed for a number of years where all locked .
In recent times with prices dropping there where more non locked contracts .

I was merely enquiring how much extra you paid for a two year fix in today's market .

Me i must be on switch number ten or so .
Current to April 2017.
Zog gas
Gas .02733 per kwh
Standing Charge .10p per day
+vat 5%.

GB Elec
Elec .10275 per kwh
Standing Charge .15p per day
+ vat 5%

Sosumi

JJ Egan,

In early July, both F&W and 1 were on E.ON's (own) v19 I-Year fix.

Each of us decided, independently, to switch to Energy Helpline's 2-Year Collective Fix with E.ON, which had been launched on 20 June (just before the EU Referendum) and ran for 28 days. (We're both very glad we did!)

He and I live in different regions and we compared the difference that made to our respective tariffs HERE.

His tariff is in black, mine is in red.

I hope this provides the answer to your question.

Nobody is "locked in" with a fixed tariff. You can leave one at any time it suits you.

Some of them, however, levy an Early Exit Fee (typically of £30 per fuel) if you leave before it expires.

Neither F&W nor I had to pay any penalties for switching from E.ON v19 to the EHL EON Collective fix because both tariffs were with E.ON.

poppasmurf_bewdley

All the gas and electricity companies have told us in the past that they couldn't reduce prices following drops in wholesale prices as they pay for their energy supplies years in advance.

So I can't see that Bexit has made any difference in just two months.

Operation Fear is still at work.

fredandwilma

JJ_Egan wrote: »

Basically the majority of contracts that where fixed for a number of years where all locked .
In recent times with prices dropping there where more non locked contracts .

I was merely enquiring how much extra you paid for a two year fix in today's market .

Me i must be on switch number ten or so .
Current to April 2017.
Zog gas
Gas .02733 per kwh
Standing Charge .10p per day
+vat 5%.

GB Elec
Elec .10275 per kwh
Standing Charge .15p per day
+ vat 5%

Yes, I've probably switched an equal amount of times as you (I've lost count,) but all with E.on, in the last two years, thus avoiding exit penalties. Another reason why i stay with E.on is because i'm perfectly happy with their smart meter system.

The prices are not too dissimilar to mine, but the difference comes with all the discounts i get with E.on, totaling £45 a year and that all important Warm Home Discount. Neither Zog nor GB energy offer these. I've done price comparisons with both companies regularly, but it's the additional discounts which make the difference to me, personally.

fredandwilma

poppasmurf_bewdley wrote: »

All the gas and electricity companies have told us in the past that they couldn't reduce prices following drops in wholesale prices as they pay for their energy supplies years in advance.

So I can't see that Bexit has made any difference in just two months.

Operation Fear is still at work.

I'm sure it probably is.


Some info here as to why prices aren't reduced even years down the line.



http://www.telegraph.co.uk/finance/personalfinance/energy-bills/12102486/If-oil-and-gas-prices-are-falling-will-I-save-money-on-my-energy-bills.html

"Energy suppliers are commercial businesses. It's about buying low and selling high and suppliers only actually need to pass on price cuts if they think people will leave them."

Mark Todd, Energyhelpline
The reason is that other costs are in your bill, not just the cost of the gas.
The cost of wholesale energy makes up around 40 to 50pc of the overall bill – the rest is made up of delivery costs, customer service, billing and energy efficiency taxes, like the green levy.
There are also marketing costs, such as TV adverts or payments to comparison websites.
David Hunter, head of strategic alliances at energy management company Schneider Electric, said comparison sites make £60 from every customer who switches their dual fuel energy bill and this is built into the overall cost. He says it's often listed as "supplier costs" in breakdowns. Suppliers rely on comparison sites for business so are unlikely to give customers a cheaper price if they come to them direct.
On the issue of passing on falling wholesale costs, which have declined for the last three years, Mark Todd, co-founder of energy switching site Energyhelpline, said suppliers are paying 50pc less for wholesale gas since the last energy price rise in 2013. If this saving was passed onto customers, it would cut household gas bills by 25pc.
Instead, suppliers have been less generous.

Source: ICIS
Mr Todd said: “From these wholesale falls, suppliers on average have passed through just 5pc gas price cuts in the last two years to their loyal standard customers.
"We’re often told companies cannot reduce the cost of tariffs because they buy gas so far in advance, but gas prices have been falling for three years now so there’s not really an excuse.
"But energy suppliers are commercial businesses. It's about buying low and selling high and suppliers only actually need to pass on price cuts if they think people will leave them."

https://www.britishgas.co.uk/the-source/our-world-of-energy/energy-explained/lauren-bravo-asks-oil-prices

So if you’re buying energy a year or two in advance, does that mean our bills will go down in a year or two’s time?

It’s not quite as simple as that. One reason is that the wholesale price of gas is only (roughly) 45% of your gas bill and a much smaller proportion of the Dual Fuel energy bill. The rest of the price covers everything else that’s needed to get the gas to customers and businesses safely – maintaining all the systems and pipes, investing in upgrading them as necessary, providing customer call centres, paying the staff, everything. That half of the bill tends to go up, because of inflation. And especially in the case of electricity, quite a lot of the cost is government taxes and levies to help finance investment in green energy for the future. The UK is a world leader in these types of investment, which is great, but the small print is extra money on our energy bills. I don’t think people always realise that.

Sosumi

Something I have been pondering for quite some while is just how long the energy supply companies are going to be prepared to continue paying comparison sites commission fees (typically £60 for dual-fuel) to put their own existing customers on to cheaper tariffs. It’s not exactly a profitable exercise.

The first cracks in this scenario started to appear earlier this year when EDF (I think) offered a stealthy new collective fix via MSM that was hidden from view to existing EDF customers. Even the normally garrulous and self-promoting “Typical” himself stayed mum and remained dutifully and conspicuously silent about it in his MSE newsletters. But it didn’t take long before the ruse was exposed by people posting on here.

Recently, this same covert strategy has been adopted with SSE’s new collective tariff (v8). And that has also been exposed on here.

E.ON tried a different and more honourable tactic. I always figured that the reasoning behind E.ON suddenly (and uncharacteristically) offering a new and highly competitive fix of its own, with its v17, v18 and v19 one-year fixes, last January and February, was that if it was shortly going to have to pay a comparison site £60 a shot to retain those of its existing customers who stay alert and would be likely to take the opportunity to lower their existing tariff by hopping on to a forthcoming collective tariff (along with customers of other suppliers whom it was attempting to poach), it might as well cut out the expensive middle man by offering the tariff directly for a brief while.

(A cynic might take the view that if it offered a cheap tariff directly for less than a fortnight, it wouldn’t have to display it on its own website and alert all its other customers to it within 14 days. :cool: )

We’ll never know, because E.ON had failed to realise that by launching such a cheap tariff it was laying itself open to the charge that it was ripping off elderly customers who were on its expensive Age Concern tariff.

Once that argument was launched (probably by its competitors) and then advanced publicly, E.ON had to abandon its own cheap fix tariff pronto and hike it up by several hundred pounds a year to v20 in order to refute, belatedly, the charge.

In the meantime, energy wholesale prices bottomed out and the fundamental situation changed from a falling energy market to a rising energy market.

That has altered the whole dynamic of switching for comparison sites.

It’s simple and profitable for comparison sites to persuade people to abandon their existing tariff or fix and switch to a new, cheaper one. Lower tariff = lower bills. Even poppasmurf_bewdley was able to work that one out.

But when the market is rising, people are, understandably, reluctant to abandon a cheaper tariff and switch to a more expensive one.

So, to keep the commission money rolling in, comparison sites (including MSE’s) have to resort to threatening people that unless they do opt for a higher tariff now, prices will have become so much higher by the time their present fix runs out that their next one will be horrendously expensive.

Through all of that, I still wonder what energy supply companies are going to do to eliminate the fact that every time they launch a new collective fix with a comparison site, in a lure to poach new customers from other suppliers, they find themselves having to pay that comparison site £60 a time to keep many of their own customers.

Eventually, they’re bound to do something – some already have.

Like F&W, who opted for the same 2-Year collective fix on E.ON as I did, a couple of months ago. I think it’s likely that I shall remain watching from the sidelines until the summer of 2018 and observe as a disinterested but not uninterested spectator how the suppliers and the comparison sites respond to these changed circumstances and ground rules.

(Text removed by MSE Forum Team)

teddysmum

JJ_Egan wrote: »

Basically the majority of contracts that where fixed for a number of years where all locked .
In recent times with prices dropping there where more non locked contracts .

I was merely enquiring how much extra you paid for a two year fix in today's market .

Me i must be on switch number ten or so .
Current to April 2017.
Zog gas
Gas .02733 per kwh
Standing Charge .10p per day
+vat 5%.

GB Elec
Elec .10275 per kwh
Standing Charge .15p per day
+ vat 5%

Do you not mean standing charges of 10p and 15p per day and not 0.10p and 0.15p ie less than 1p per day ??

fredandwilma

Sosumi wrote: »

E.ON tried a different and more honourable tactic. I always figured that the reasoning behind E.ON suddenly (and uncharacteristically) offering a new and highly competitive fix of its own, with its v17, v18 and v19 one-year fixes, last January and February,

E.ON Energy Fixed 1 Year V17 Tariff Terms Available between 11th January 2016 and 19th January 2016

E.ON Energy Fixed 1 Year V18 Tariff Terms Available between 20th January 2016 and 21st January 2016


E.ON Energy Fixed 1 Year V19 Tariff Terms Available between 22nd January 2016 and 4th February 2016 (although it was extended until 9th February 2016)

Prior to this

E.ON Energy Fixed 1 Year V16 Tariff Terms Available between 11th February 2015 and 11th January 2016

was available for almost a whole year in comparison.



I seem to remember i was switching tariffs so frequently at that time, they don't even show up on my bill, (I've just checked.) I was on them for such a short period of time.

I note the EHL two year fix is cheaper than the E.ON MSE Fixed 1 Collective Sept 2015 though, for me at any rate.

fredandwilma

JJ_Egan wrote: »

Basically the majority of contracts that where fixed for a number of years where all locked .
In recent times with prices dropping there where more non locked contracts .

I was merely enquiring how much extra you paid for a two year fix in today's market .

Me i must be on switch number ten or so .
Current to April 2017.
Zog gas
Gas .02733 per kwh
Standing Charge .10p per day
+vat 5%.

GB Elec
Elec .10275 per kwh
Standing Charge .15p per day
+ vat 5%

teddysmum wrote: »

Do you not mean standing charges of 10p and 15p per day and not 0.10p and 0.15p ie less than 1p per day ??

Equally 2.733 per kwh and 10.275 per kwh?


I didn't point this out (and according to their websites,) I think i know what the poster meant? Unless the error with the decimal point constitutes why they think they are on such a cheap tariff? But I know what the rates are and to be honest they are fairly comparable right now, (in terms of rate per kwh and sc.)


These are incredibly cheap tariffs otherwise and i recommend we all should move to Zog and GB energy.

WOW