Octopus Tracker

Scot_39

How exactly are you arriving at those gross margins and mark ups ?

Are you subtracting all the other non wholesale price components that suppliers pay to others - including things like

Sone Govt policy costs 
National grid and gas network distribution costs.

See the breakdown of current and July 1st duel fuel cap at 

https://www.ofgem.gov.uk/publications/customers-pay-less-energy-bills-summer

Current £2224 wholesale in £3280 cap - that's 67.8%


July £1041 wholesale in £2074 cap - that's 50%.
Network costs £394 - that's 19%
Policy costs £161 - some arguably in gross margin - split ?
Smart I guess meters £21
Etc
CfD £10.

The actual duel fuel EBIT allowance itself is currently only 1.9% - but gross profit is before own business costs etc  - and ebit is after (excluding interest and tax).

Note - once again CfD - has turned positive - was -£54 last Q at the much higher wholesale rates.

IIRC - for any significant generating capacity online to date - the CfD pricing only as high as 12p/kWh wholesale (but as normal that CfD auction rate is at 2012 baseline indexing - so need to add 11yrs cpi inflation indexing and other factors etc) - so today's rate ? - that  for FOS wind on quickest delivery timescales from the 2015 auction.

Sorry don't know the fuel splits for some of those costs.

Spoonie_Turtle

Scot_39 said:

How exactly are you arriving at those gross margins and mark ups ?

…

The actual duel fuel EBIT allowance itself is currently only 1.9% - but gross profit is before own business costs etc  - and ebit is after (excluding interest and tax).

1.9% EBIT doesn't apply to Tracker.

The current formulae are here https://octopus.energy/tracker-faqs/
("How is the price of the Octopus Tracker calculated?")  Not sure if it's been revised since Tracker v1 though.   Edit: also unclear if Telegraph_Sam was using the formula or simply calculating wholesale price vs unit rate.

Telegraph_Sam

This goes into much greater detail than I had intended. In response to the original queries I had assumed that there would be a direct fixed link between the wholesale price and my unit rate - in line with Octopus' transparent pricing. It now looks like this interpretation was wrong and Octopus calculates to cover their various individual costs like any other supplier. Or I have misunderstood something.
The margins / mark-ups are derived from page 3 of my invoices where the daily costs and charges are listed without going into the finer details.

Spoonie_Turtle

Telegraph_Sam said:

This goes into much greater detail than I had intended. In response to the original queries I had assumed that there would be a direct fixed link between the wholesale price and my unit rate - in line with Octopus' transparent pricing. It now looks like this interpretation was wrong and Octopus calculates to cover their various individual costs like any other supplier. Or I have misunderstood something.
The margins / mark-ups are derived from page 3 of my invoices where the daily costs and charges are listed without going into the finer details.

In terms of transparent pricing, it is linked from the tariff page we read before we signed up.  It's also easily found afterwards, for anyone who does want to check the pricing   And the formula is a fixed, direct link.  They are upfront about factoring in costs plus some profit - if they didn't, it would have been a disaster from the off.

Qyburn

Telegraph_Sam said:

This goes into much greater detail than I had intended. In response to the original queries I had assumed that there would be a direct fixed link between the wholesale price and my unit rate - in line with Octopus' transparent pricing. It now looks like this interpretation was wrong and Octopus calculates to cover their various individual costs like any other supplier. Or I have misunderstood something.
The margins / mark-ups are derived from page 3 of my invoices where the daily costs and charges are listed without going into the finer details.

The formula is pretty simple, a % uplift of wholesale price, plus a fixed additional price per unit. For N Scotland, where "W" is wholesale price ..

• Electricity unit charge: (W * 1.1994) + 7.863 p per kWh

Telegraph_Sam

Why then does in my case (NE England) the "margin" between wholesale price and retail unit price vary on a daily basis? I had always assumed that this would be a constant - until now.
I suppose that the formula being part percentage part fixed, some variation is predictable. I am not a mathematician 

Spoonie_Turtle

Telegraph_Sam said:

Why then does in my case (NE England) the "margin" between wholesale price and retail unit price vary on a daily basis? I had always assumed that this would be a constant - until now.
I suppose that the formula being part percentage part fixed, some variation is predictable. I am not a mathematician 

That exactly.  The 1.xxp will be a different % of the unit rate because the rest of it fluctuates.

Edited: didn't notice the 7.xxp was for electricity, not gas

Telegraph_Sam

I'll check it out for the Noth East. Would you happen to have the link to where the various regional formulae are listed?

QrizB

Telegraph_Sam said:

I'll check it out for the Noth East. Would you happen to have the link to where the various regional formulae are listed?

It's all there on the Tracker FAQ page, as previously stated.

https://octopus.energy/tracker-faqs/

Scot_39

Yes - the cap only applies to the default tariff - doesn't apply to things like Tracker or Agile etc. I just included that and some of the other costs that impact the difference between wholesale and our final utility bills. Thanks for the link - the pseudo 20% + fixed per kW offset to W certainly looks interesting. It's certainly another example of Octopus's willingness to operate outside the norms of many of the big 6.