Octopus Tracker

Doc_N

QrizB said:

Telegraph_Sam said:

I have now got the mathematics to add up using these modifications. The "mark-up" is contained in my Northern "formula" . Using p / kwh as the common denominator I reckon Octopus' gross mark-up is 42% / gross margin = 30%.  At a glance higher than I would have expected for a high volume commodity business, but may be there are extenuating circs.

I still don't follow.

Are you claiming that Octopus are charging you 30-40% more than the Tracker formula would suggest? If so, you should take it up with Octopus.

Or are you saying that you are being charged 30-40% more than the wholesale price? Because that is entirely normal, you are not buying your gas at wholesale prices (as is plain from the formula).

There’s no suggestion I can see that Octopus are charging more than the formula provides for. Just a suggestion that a markup of 42% on a very high volume commodity might be rather high.

And it does indeed look rather high, even allowing for the obvious transmission and other costs.

Telegraph_Sam

I think Doc_N's latter interpretation is what I have in mind.
My Tracker gas unit price(s) as per invoice corresponds to what the Northern formula predicts. The difference between this my retail price and the wholesale price is Octopus' margin or mark-up which I had been querying.
I hope that the explanation is no more complicated than that!

westv

I've just received the email from Octopus telling me my Tracker contract ends next month and also telling me I'll switch to Flexible if I don't do anything. They quote the rates for Flexible but not for Tracker.

QrizB

Telegraph_Sam said:

I think Doc_N's latter interpretation is what I have in mind.
My Tracker gas unit price(s) as per invoice corresponds to what the Northern formula predicts. The difference between this my retail price and the wholesale price is Octopus' margin or mark-up which I had been querying.
I hope that the explanation is no more complicated than that!

That's also quite easy to explain. There are costs incurred in supplying you (or me) with a kWh of gas that are above and beyond the wholesale gas price.

The Tracker illustration applet on Octopus's website illustrates these costs.

Doc_N

QrizB said:

Telegraph_Sam said:

I think Doc_N's latter interpretation is what I have in mind.
My Tracker gas unit price(s) as per invoice corresponds to what the Northern formula predicts. The difference between this my retail price and the wholesale price is Octopus' margin or mark-up which I had been querying.
I hope that the explanation is no more complicated than that!

That's also quite easy to explain. There are costs incurred in supplying you (or me) with a kWh of gas that are above and beyond the wholesale gas price.

The Tracker illustration applet on Octopus's website illustrates these costs.

I don’t think anybody’s disputing the fact that there are large costs involved between pipeline and customer, not the least of which will be transmission and billing.

What might well be disputed though is whether a markup of 42% is reasonable, given the huge volumes concerned. That’s an area for Ofgem though. 

scobie

westv said:

I've just received the email from Octopus telling me my Tracker contract ends next month and also telling me I'll switch to Flexible if I don't do anything. They quote the rates for Flexible but not for Tracker.

How would they be able to quote Tracker rates when those rates are determined every twenty four hours ?

westv

scobie said:

westv said:

I've just received the email from Octopus telling me my Tracker contract ends next month and also telling me I'll switch to Flexible if I don't do anything. They quote the rates for Flexible but not for Tracker.

How would they be able to quote Tracker rates when those rates are determined every twenty four hours ?

Because there are limits on the rates. 

bristolleedsfan

westv said:

scobie said:

westv said:

I've just received the email from Octopus telling me my Tracker contract ends next month and also telling me I'll switch to Flexible if I don't do anything. They quote the rates for Flexible but not for Tracker.

How would they be able to quote Tracker rates when those rates are determined every twenty four hours ?

Because there are limits on the rates. 

100p kWh E - 30p kWh gas

CSI_Yorkshire

Doc_N said:

QrizB said:

Telegraph_Sam said:

I think Doc_N's latter interpretation is what I have in mind.
My Tracker gas unit price(s) as per invoice corresponds to what the Northern formula predicts. The difference between this my retail price and the wholesale price is Octopus' margin or mark-up which I had been querying.
I hope that the explanation is no more complicated than that!

That's also quite easy to explain. There are costs incurred in supplying you (or me) with a kWh of gas that are above and beyond the wholesale gas price.

The Tracker illustration applet on Octopus's website illustrates these costs.

I don’t think anybody’s disputing the fact that there are large costs involved between pipeline and customer, not the least of which will be transmission and billing.

What might well be disputed though is whether a markup of 42% is reasonable, given the huge volumes concerned. That’s an area for Ofgem though. 

I think people might have an issue with you describing it as 'markup' - which to many people means "profit" - rather than 'difference between wholesale and total cost'.  And to be fair, T_S did say "gross" when originally posing the comment, so it clearly isn't what they meant - just how it gets interpreted. 

Plus many of the charges are per-kWh, so huge volume doesn't make it cheaper.

edit in italics.

bristolleedsfan

scobie said:

westv said:

I've just received the email from Octopus telling me my Tracker contract ends next month and also telling me I'll switch to Flexible if I don't do anything. They quote the rates for Flexible but not for Tracker.

How would they be able to quote Tracker rates when those rates are determined every twenty four hours ?

They are supposed to quote potential new switchers to Tracker tariff estimated kWh rate x estimated usage for 12 months based on whatever method they use for calculating estimated kWh rate.....