Octopus Tracker

bristolleedsfan

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Qyburn said:

That's approaching a conspiracy theory.  Ofgem calculates the price at which a Supplier, correctly hedging, can barely make a profit.  Octopus sells for less than half that price but still makes a profit, and want to keep this fact secret.

Evidence suggesting loss-making - Octopus's statement, comparison with Ofgem calculations and the fact they're limiting uptake

Evidence contradicting - anything said by a big company must by definition be untrue

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

The complication is the UR caps that Octopus have chosen to apply to the tariff - if URs go above this, Octopus pay the difference - they can increase, or remove the caps for existing customers, but so far have chosen to bring out a new version of Tracker with increased caps. The question then is how many people are on the earlier versions which have lower caps? Presumably not many in the grand scheme of things (IIRC, it was claimed earlier in this thread that there are only 16 people on v2, for example (though it was only available for a short period of time)).

The original Tracker v1, which has the lowest UR caps, certainly was sitting at those caps for a significant amount of time over winter 21/22 etc., so will have cost Octopus, but again, how many people were on that version?

Customer numbers seem to have increased (significantly?) since the tariff has come to the attention of the wider public, but the most recent version of Tracker, introduced in November, has very high caps; in addition, URs have been  'low' (relatively speaking) for most of the autumn, winter and spring so far, and much of the time (often well) below EPG.

Given all of the above, it seems unlikely, IMO, that, overall and all things considered, Octopus is making a significant loss due to Tracker?

Then again, I don't work in the industry, let alone for Octopus, and the above is just my layman's understanding of how it works, so... ?

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

I presume due to problems caused by some now defunct energy companies not hedging, OFGEM required virtually all customers energy needs to be hedged irrespective of type of tariff customer is on. I replied quoting what Octo chief told someone a couple of months ago, not sure would be productive to have pages of discussion on it, probably would have been quicker for me to have found the screenshot and just re-posted it.

SJMALBA

bristolleedsfan said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Qyburn said:

That's approaching a conspiracy theory.  Ofgem calculates the price at which a Supplier, correctly hedging, can barely make a profit.  Octopus sells for less than half that price but still makes a profit, and want to keep this fact secret.

Evidence suggesting loss-making - Octopus's statement, comparison with Ofgem calculations and the fact they're limiting uptake

Evidence contradicting - anything said by a big company must by definition be untrue

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

The complication is the UR caps that Octopus have chosen to apply to the tariff - if URs go above this, Octopus pay the difference - they can increase, or remove the caps for existing customers, but so far have chosen to bring out a new version of Tracker with increased caps. The question then is how many people are on the earlier versions which have lower caps? Presumably not many in the grand scheme of things (IIRC, it was claimed earlier in this thread that there are only 16 people on v2, for example (though it was only available for a short period of time)).

The original Tracker v1, which has the lowest UR caps, certainly was sitting at those caps for a significant amount of time over winter 21/22 etc., so will have cost Octopus, but again, how many people were on that version?

Customer numbers seem to have increased (significantly?) since the tariff has come to the attention of the wider public, but the most recent version of Tracker, introduced in November, has very high caps; in addition, URs have been  'low' (relatively speaking) for most of the autumn, winter and spring so far, and much of the time (often well) below EPG.

Given all of the above, it seems unlikely, IMO, that, overall and all things considered, Octopus is making a significant loss due to Tracker?

Then again, I don't work in the industry, let alone for Octopus, and the above is just my layman's understanding of how it works, so... ?

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

I presume due to problems caused by some now defunct energy companies not hedging, OFGEM required virtually all customers energy needs to be hedged irrespective of type of tariff customer is on. I replied quoting what Octo chief told someone a couple of months ago, not sure would be productive to have pages of discussion on it, probably would have been quicker for me to have found the screenshot and just re-posted it.

I've not seen the screenshot to which you refer, but given that the majority of customers are on SVT, which is (should be) hedged, might that not account for the 'virtually all' bit, but exclude Tracker, which even now, must account for a very small proportion of energy users?

I can't see how Tracker can be hedged, and the Tracker FAQ implies that it is not?

Qyburn

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

That's the point, Octopus has already committed to hedging, it is paying the hedged price for energy bought months in advance. Tracker customers are being supplied from that hedged advance purchased energy supply, which is costing Octopus that hedged price. 

Maybe someone can explain clearer.  But it seems to me that they can't do both, can't bin their committed supply arrangements, defaulting on those contracts, just because lots of people have joined Tracker and Octopus can buy their energy on the day ahead market.

bristolleedsfan

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Qyburn said:

That's approaching a conspiracy theory.  Ofgem calculates the price at which a Supplier, correctly hedging, can barely make a profit.  Octopus sells for less than half that price but still makes a profit, and want to keep this fact secret.

Evidence suggesting loss-making - Octopus's statement, comparison with Ofgem calculations and the fact they're limiting uptake

Evidence contradicting - anything said by a big company must by definition be untrue

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

The complication is the UR caps that Octopus have chosen to apply to the tariff - if URs go above this, Octopus pay the difference - they can increase, or remove the caps for existing customers, but so far have chosen to bring out a new version of Tracker with increased caps. The question then is how many people are on the earlier versions which have lower caps? Presumably not many in the grand scheme of things (IIRC, it was claimed earlier in this thread that there are only 16 people on v2, for example (though it was only available for a short period of time)).

The original Tracker v1, which has the lowest UR caps, certainly was sitting at those caps for a significant amount of time over winter 21/22 etc., so will have cost Octopus, but again, how many people were on that version?

Customer numbers seem to have increased (significantly?) since the tariff has come to the attention of the wider public, but the most recent version of Tracker, introduced in November, has very high caps; in addition, URs have been  'low' (relatively speaking) for most of the autumn, winter and spring so far, and much of the time (often well) below EPG.

Given all of the above, it seems unlikely, IMO, that, overall and all things considered, Octopus is making a significant loss due to Tracker?

Then again, I don't work in the industry, let alone for Octopus, and the above is just my layman's understanding of how it works, so... ?

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

I presume due to problems caused by some now defunct energy companies not hedging, OFGEM required virtually all customers energy needs to be hedged irrespective of type of tariff customer is on. I replied quoting what Octo chief told someone a couple of months ago, not sure would be productive to have pages of discussion on it, probably would have been quicker for me to have found the screenshot and just re-posted it.

I've not seen the screenshot to which you refer, but given that the majority of customers are on SVT, which is (should be) hedged, might that not account for the 'virtually all' bit, but exclude Tracker, which even now, must account for a very small proportion of energy users?

I can't see how Tracker can be hedged, and the Tracker FAQ implies that it is not?

Maybe in order for Tracker tariff to qualify for potential EPG discount customers energy had to be hedged or maybe you are correct and tracker customers energy continues not to be hedged.

https://forums.moneysavingexpert.com/discussion/comment/79885382#Comment_79885382

Chrysalis

bristolleedsfan said:

Maybe in order for Tracker tariff to qualify for potential EPG discount customers energy had to be hedged or maybe you are correct and tracker customers energy continues not to be hedged.

https://forums.moneysavingexpert.com/discussion/comment/79885382#Comment_79885382

Yep, that comment suggests, they have hedged the energy that tracker customers consume (so they could get EPG subsidy), but have still sold the tariff as if it wasnt hedged, hence it being loss making.

bristolleedsfan

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Qyburn said:

That's approaching a conspiracy theory.  Ofgem calculates the price at which a Supplier, correctly hedging, can barely make a profit.  Octopus sells for less than half that price but still makes a profit, and want to keep this fact secret.

Evidence suggesting loss-making - Octopus's statement, comparison with Ofgem calculations and the fact they're limiting uptake

Evidence contradicting - anything said by a big company must by definition be untrue

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

The complication is the UR caps that Octopus have chosen to apply to the tariff - if URs go above this, Octopus pay the difference - they can increase, or remove the caps for existing customers, but so far have chosen to bring out a new version of Tracker with increased caps. The question then is how many people are on the earlier versions which have lower caps? Presumably not many in the grand scheme of things (IIRC, it was claimed earlier in this thread that there are only 16 people on v2, for example (though it was only available for a short period of time)).

The original Tracker v1, which has the lowest UR caps, certainly was sitting at those caps for a significant amount of time over winter 21/22 etc., so will have cost Octopus, but again, how many people were on that version?

Customer numbers seem to have increased (significantly?) since the tariff has come to the attention of the wider public, but the most recent version of Tracker, introduced in November, has very high caps; in addition, URs have been  'low' (relatively speaking) for most of the autumn, winter and spring so far, and much of the time (often well) below EPG.

Given all of the above, it seems unlikely, IMO, that, overall and all things considered, Octopus is making a significant loss due to Tracker?

Then again, I don't work in the industry, let alone for Octopus, and the above is just my layman's understanding of how it works, so... ?

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

I presume due to problems caused by some now defunct energy companies not hedging, OFGEM required virtually all customers energy needs to be hedged irrespective of type of tariff customer is on. I replied quoting what Octo chief told someone a couple of months ago, not sure would be productive to have pages of discussion on it, probably would have been quicker for me to have found the screenshot and just re-posted it.

I've not seen the screenshot to which you refer, but given that the majority of customers are on SVT, which is (should be) hedged, might that not account for the 'virtually all' bit, but exclude Tracker, which even now, must account for a very small proportion of energy users?

I can't see how Tracker can be hedged, and the Tracker FAQ implies that it is not?

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Qyburn said:

That's approaching a conspiracy theory.  Ofgem calculates the price at which a Supplier, correctly hedging, can barely make a profit.  Octopus sells for less than half that price but still makes a profit, and want to keep this fact secret.

Evidence suggesting loss-making - Octopus's statement, comparison with Ofgem calculations and the fact they're limiting uptake

Evidence contradicting - anything said by a big company must by definition be untrue

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

The complication is the UR caps that Octopus have chosen to apply to the tariff - if URs go above this, Octopus pay the difference - they can increase, or remove the caps for existing customers, but so far have chosen to bring out a new version of Tracker with increased caps. The question then is how many people are on the earlier versions which have lower caps? Presumably not many in the grand scheme of things (IIRC, it was claimed earlier in this thread that there are only 16 people on v2, for example (though it was only available for a short period of time)).

The original Tracker v1, which has the lowest UR caps, certainly was sitting at those caps for a significant amount of time over winter 21/22 etc., so will have cost Octopus, but again, how many people were on that version?

Customer numbers seem to have increased (significantly?) since the tariff has come to the attention of the wider public, but the most recent version of Tracker, introduced in November, has very high caps; in addition, URs have been  'low' (relatively speaking) for most of the autumn, winter and spring so far, and much of the time (often well) below EPG.

Given all of the above, it seems unlikely, IMO, that, overall and all things considered, Octopus is making a significant loss due to Tracker?

Then again, I don't work in the industry, let alone for Octopus, and the above is just my layman's understanding of how it works, so... ?

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

I presume due to problems caused by some now defunct energy companies not hedging, OFGEM required virtually all customers energy needs to be hedged irrespective of type of tariff customer is on. I replied quoting what Octo chief told someone a couple of months ago, not sure would be productive to have pages of discussion on it, probably would have been quicker for me to have found the screenshot and just re-posted it.

I can't see how Tracker can be hedged, and the Tracker FAQ implies that it is not?

They "might" use 12 month estimated rate figures if they have hedged some/all tracker customers.

SJMALBA

Qyburn said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

That's the point, Octopus has already committed to hedging, it is paying the hedged price for energy bought months in advance. Tracker customers are being supplied from that hedged advance purchased energy supply, which is costing Octopus that hedged price. 

Maybe someone can explain clearer.  But it seems to me that they can't do both, can't bin their committed supply arrangements, defaulting on those contracts, just because lots of people have joined Tracker and Octopus can buy their energy on the day ahead market.

So Octopus effectively aren't allowed to buy DA for Tracker (even though they base the UR for Tracker on DA), but have to use hedged energy instead?! That's crazy!

If that is the case, why haven't they removed Tracker as an option?

bristolleedsfan

SJMALBA said:

Qyburn said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

That's the point, Octopus has already committed to hedging, it is paying the hedged price for energy bought months in advance. Tracker customers are being supplied from that hedged advance purchased energy supply, which is costing Octopus that hedged price. 

Maybe someone can explain clearer.  But it seems to me that they can't do both, can't bin their committed supply arrangements, defaulting on those contracts, just because lots of people have joined Tracker and Octopus can buy their energy on the day ahead market.

So Octopus effectively aren't allowed to buy DA for Tracker (even though they base the UR for Tracker on DA), but have to use hedged energy instead?! That's crazy!

If that is the case, why haven't they removed Tracker as an option?

Octopus consistently say that all its beta tariffs are loss making and that they offer them to show they can be done.

SJMALBA

bristolleedsfan said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Qyburn said:

That's approaching a conspiracy theory.  Ofgem calculates the price at which a Supplier, correctly hedging, can barely make a profit.  Octopus sells for less than half that price but still makes a profit, and want to keep this fact secret.

Evidence suggesting loss-making - Octopus's statement, comparison with Ofgem calculations and the fact they're limiting uptake

Evidence contradicting - anything said by a big company must by definition be untrue

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

The complication is the UR caps that Octopus have chosen to apply to the tariff - if URs go above this, Octopus pay the difference - they can increase, or remove the caps for existing customers, but so far have chosen to bring out a new version of Tracker with increased caps. The question then is how many people are on the earlier versions which have lower caps? Presumably not many in the grand scheme of things (IIRC, it was claimed earlier in this thread that there are only 16 people on v2, for example (though it was only available for a short period of time)).

The original Tracker v1, which has the lowest UR caps, certainly was sitting at those caps for a significant amount of time over winter 21/22 etc., so will have cost Octopus, but again, how many people were on that version?

Customer numbers seem to have increased (significantly?) since the tariff has come to the attention of the wider public, but the most recent version of Tracker, introduced in November, has very high caps; in addition, URs have been  'low' (relatively speaking) for most of the autumn, winter and spring so far, and much of the time (often well) below EPG.

Given all of the above, it seems unlikely, IMO, that, overall and all things considered, Octopus is making a significant loss due to Tracker?

Then again, I don't work in the industry, let alone for Octopus, and the above is just my layman's understanding of how it works, so... ?

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

I presume due to problems caused by some now defunct energy companies not hedging, OFGEM required virtually all customers energy needs to be hedged irrespective of type of tariff customer is on. I replied quoting what Octo chief told someone a couple of months ago, not sure would be productive to have pages of discussion on it, probably would have been quicker for me to have found the screenshot and just re-posted it.

I've not seen the screenshot to which you refer, but given that the majority of customers are on SVT, which is (should be) hedged, might that not account for the 'virtually all' bit, but exclude Tracker, which even now, must account for a very small proportion of energy users?

I can't see how Tracker can be hedged, and the Tracker FAQ implies that it is not?

Maybe in order for Tracker tariff to qualify for potential EPG discount customers energy had to be hedged or maybe you are correct and tracker customers energy continues not to be hedged.

https://forums.moneysavingexpert.com/discussion/comment/79885382#Comment_79885382

He says that EPG applies only to variable tariffs, which isn't the case; also, Tracker is a variable tariff.

bristolleedsfan

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

bristolleedsfan said:

SJMALBA said:

Qyburn said:

That's approaching a conspiracy theory.  Ofgem calculates the price at which a Supplier, correctly hedging, can barely make a profit.  Octopus sells for less than half that price but still makes a profit, and want to keep this fact secret.

Evidence suggesting loss-making - Octopus's statement, comparison with Ofgem calculations and the fact they're limiting uptake

Evidence contradicting - anything said by a big company must by definition be untrue

Tracker is not hedged, it's based upon day ahead wholesale prices to which Octopus applies its own formula to arrive at the retail unit rate charged to customers (which covers their costs and, presumably, some profit?).

The complication is the UR caps that Octopus have chosen to apply to the tariff - if URs go above this, Octopus pay the difference - they can increase, or remove the caps for existing customers, but so far have chosen to bring out a new version of Tracker with increased caps. The question then is how many people are on the earlier versions which have lower caps? Presumably not many in the grand scheme of things (IIRC, it was claimed earlier in this thread that there are only 16 people on v2, for example (though it was only available for a short period of time)).

The original Tracker v1, which has the lowest UR caps, certainly was sitting at those caps for a significant amount of time over winter 21/22 etc., so will have cost Octopus, but again, how many people were on that version?

Customer numbers seem to have increased (significantly?) since the tariff has come to the attention of the wider public, but the most recent version of Tracker, introduced in November, has very high caps; in addition, URs have been  'low' (relatively speaking) for most of the autumn, winter and spring so far, and much of the time (often well) below EPG.

Given all of the above, it seems unlikely, IMO, that, overall and all things considered, Octopus is making a significant loss due to Tracker?

Then again, I don't work in the industry, let alone for Octopus, and the above is just my layman's understanding of how it works, so... ?

Screenshot posted either on this thread of another tracker thread of a DM reply from Octo chief along the lines that Ofgem have required energy companies to hedge virtually all customers energy.

How do you hedge Tracker?

I presume due to problems caused by some now defunct energy companies not hedging, OFGEM required virtually all customers energy needs to be hedged irrespective of type of tariff customer is on. I replied quoting what Octo chief told someone a couple of months ago, not sure would be productive to have pages of discussion on it, probably would have been quicker for me to have found the screenshot and just re-posted it.

I've not seen the screenshot to which you refer, but given that the majority of customers are on SVT, which is (should be) hedged, might that not account for the 'virtually all' bit, but exclude Tracker, which even now, must account for a very small proportion of energy users?

I can't see how Tracker can be hedged, and the Tracker FAQ implies that it is not?

Maybe in order for Tracker tariff to qualify for potential EPG discount customers energy had to be hedged or maybe you are correct and tracker customers energy continues not to be hedged.

https://forums.moneysavingexpert.com/discussion/comment/79885382#Comment_79885382

He says that EPG applies only to variable tariffs, which isn't the case; also, Tracker is a variable tariff.

EPG discount applied to fixed rate/term tariffs that were in force prior to 1 October and variable tariffs taken out after 1 October hence no fixed term tariffs being offered since 1 October.

Maybe he did not have time to write pages and pages of explanations.