MSE News: Energy price cap set to come into force in December

MSE_Andrew

The new energy price cap is planned to come into effect in December, regulator Ofgem has revealed...

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'Energy price cap set to come into force in December'

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Smodlet

All this will do is make life more difficult and expensive for those of us not too lazy to monitor tariffs and switch whenever practicable. Why deny those who enjoy wasting their money the privilege of doing so?

PennineAcute

Picking a company at random, Utilita. Their prepay tariff is £240 more than what I am paying now.

I am sorry, but this is why caps are needed. There is no way on earth that it costs them £240 extra, if I was prepay.

I read that smart meters were supposed to lower the rates that prepay customers pay. God know what they would charge, if they were key meter only.

PennineAcute

Saying that, there is already a cap in place for prepay. A load of use that is.

Li0nhead

Energy cap?

wavelets

Q1. Will suppliers view this as a price cap, or a price target at which to set all their tariffs?

Q2. Will the price cap structure effectively prevent the current zero (and almost zero) standing charge tariffs currently available to credit metered customers?
... as it did to PPM customers and hence add £100 standing charge to low users bills before they even use anything?

HornetSaver

No-one in the country has done more to help people get into the mindset of driving down energy costs than MSE and Martin Lewis. Nonetheless, I think this is a mistake.

My concern with a cap is that it reduces the incentive for people to be more energy efficient. The current system functions very well as a market, albeit very bad for those vulnerable people who do not engage with it or whose usage needs are high.

As a replacement to the winter fuel allowance, standing charges for gas and electricity should be halved for people who would qualify for the standard winter fuel payment and eliminated for people who get an enhanced rate. At the moment the cost of winter fuel allowance is bourne by the taxpayer and my belief is that the burden should be shifted to the energy companies, who will by definition have made sizeable profits out of these people for decades.

More needs to be done to help those who are in fuel poverty or who for health reasons have abnormally high usage needs, and this is where the taxpayer is a more appropriate source of funding, as someone's financial position is less of a relevance to energy companies. The current cost of winter fuel allowance (which would be available money as it would now effectively be funded by the energy companies in the form of waived standing charges) should be used by the government to pay subsidies to the energy company to reduce the cost per unit of energy for identified vulnerable people, distributed in the manner that the government of the day sees best fit to tackle that problem.

Service, switching bonuses, and the different cost per unit of energy between energy companies, should still ensure that there's competition in the market even among the groups mentioned above.

PennineAcute

Fuel poverty is covered for a lot of people with the Warm Home Discount. If the cap is going to be similar to the current prepay cap, then it will be still be, the more the use, the more you pay. It is more of a rate cap than an overall cap.


For most companies, the current prepay cap is let's get our prices as close to the cap as possible.

brewerdave

I suspect that the old SVR will have all but vanished by the time this happens - the bigger Cos. will just move their SVR customers onto a one year fix, with no choice other than to switch.

Consumerist

brewerdave wrote: »

I suspect that the old SVR will have all but vanished by the time this happens - the bigger Cos. will just move their SVR customers onto a one year fix, with no choice other than to switch.

Enter the Standard Fixed Rate (SFR).

Ofgem's (sole) mission seems to have been to encourage switching by those legacy or "sticky" customers. In this endeavour they have had only marginal success and it is my expectation that they will continue in their abject failure in this matter too.

Although we need a regulator, I'm not sure Ofgem is up to the job.

VT82

This is so bl00dy stupid!


The cap will just become everyone's SVR rate near as dammit, and when prices go up twice a year, it will be a lightning rod for criticism of energy prices (easy day for the media to write let's-make-people's-blood-boil headlines), except now the Government will be getting themselves blamed for it instead of the energy companies. Have they learnt nothing from the annual rail fares price increase cap fiasco?!?!