Energy news in general

[Deleted User]

Deleted_User said:

The estimate for what this is going to cost each customer extra on average, has already gone up from previous forecasts of £100 to £240. Plus it looks like we are tied in to this process for at least a couple of years. 

Conversely, I have EVERY confidence that if the wholesale market stabilises, and costs come down, those reductions will be passed on to the customer. Does anything ever come down? 

Bear in mind that the Committee that advises the Government on Net Zero is advising that green taxes should be added to gas bills to nudge consumers towards non fossil fuel heating solutions.

[Deleted User]

Nudge? More like using a sledgehammer. Because, of course, we can’t think for ourselves.

It’s like everything else, there’s no point me going green if the other 60 million people don’t. Plus the Government will change its mind, no doubt, at some point down the line. 

QrizB

Deleted_User said:

Conversely, I have EVERY confidence that if the wholesale market stabilises, and costs come down, those reductions will be passed on to the customer. Does anything ever come down? 

Yes, prices fall. The Ofgem cap, for example, has previously falllen. See this thread.

Personally, I was paying more to nPower for electricity in 2013 (15.9p/kWh) than at any time since, until now. For gas the highest rate was Southern Electric in 2014 at 4.36p/kWh, a price that remains a record (although that record's likely to fall next year when the cap is raised).

Sea_Shell

[Deleted User] said:

Sea_Shell said:

I've read the letter.    

One thing occurs to me, and I'm not sure if it's covered in the letter (can't see for looking?)

Each affected supplier is able to make a claim for "reasonable costs".
These will differ massively between suppliers, depending on how many SoLR customers they have taken on.
Will these costs be reclaimable by each individual supplier, or will they be aggregated by OFGEM across the market?

Surely they'd have to be aggregated, otherwise the really big suppliers will be trying to pass on much bigger costs than the smaller suppliers.

(if this is stated, can someone point it out to the hard of seeing - thanks - that's a 2 coffee document!!)

As I understand it, the costs are passed on to the National Grid which, in turn, are then passed on to energy companies in the form of Grid charges. I would assume that these charges are pro-rated based on the amount of energy that each supplier supplies. 

Reasonable costs can include, inter alia, the extra administrative costs of taking on customers from a failed supplier; the additional costs of buying in extra energy to support the new customer base, and the costs associated with the Consumer Levy. To a degree, these costs will be offset by a saving in referral fees. Some experts are suggesting that these extra costs could be as high as £300 for every SoLR consumer. 

Edit: I should have added that Ofgem will also seek to recover any outstanding Green taxes that the failed supplier hasn’t paid.

https://www.citizensadvice.org.uk/about-us/about-us1/media/press-releases/failed-energy-suppliers-cost-consumers-255m-since-2018-says-citizens-advice/

BiB - But what if you're with a supplier that's never had to be a SoLR.  Will you benefit from not having levies added?

If only those suppliers who have claimed can charge extra, then customers of those suppliers will be paying substantially more, under a "cap plus"??

Are we heading for a two tier cap?
SoLR or non-SoLR?

[Deleted User]

@Sea_Shell Your first point - no, EVERYONE cops for a share of the charge. Hardly seems fair, but there you go. 

[Deleted User]

@[Deleted User] So it's gone up from £240 to £300 each while I've been typing! 

QrizB

Sea_Shell said:

If only those suppliers who have claimed can charge extra, then customers of those suppliers will be paying substantially more, under a "cap plus"??
Are we heading for a two tier cap? SoLR or non-SoLR?

That's not quite how it works. Every supplier will pay the same extra amount.

• The SoLRs appply to Ofgem for reimbursement of their costs.
• If Ofgem agrees, the bills are passed to the network operators.
• The network operators then add a charge to every connection on their network, paid by the suppliers.
• Your supplier passes that charge on via your bill.

So, for example, every home on SSEN's network could be asked to pay an extra £5/month to cover Hawaii Energy's SoLR costs. This will be collected by my supplier (Alaska Energy, say); Alaska will pass the money to the SSEN, who will pass it to Ofgem, who will pass it to Hawaii.

Sea_Shell

Ah, understand now, I think!?  Thanks.

So a non SoLR supplier will "charge" customers, and collect the money but they have to pass the money back up the chain, to be paid to the effected SoLRs.  Yes?

Sea_Shell

Deleted_User said:

@[Deleted User] So it's gone up from £240 to £300 each while I've been typing! 

Over what period?  Annually, or per cap cycle (6 months)

wakeupalarm

QrizB said:

Sea_Shell said:

If only those suppliers who have claimed can charge extra, then customers of those suppliers will be paying substantially more, under a "cap plus"??
Are we heading for a two tier cap? SoLR or non-SoLR?

That's not quite how it works. Every supplier will pay the same extra amount.

• The SoLRs appply to Ofgem for reimbursement of their costs.
• If Ofgem agrees, the bills are passed to the network operators.
• The network operators then add a charge to every connection on their network, paid by the suppliers.
• Your supplier passes that charge on via your bill.

So, for example, every home on SSEN's network could be asked to pay an extra £5/month to cover Hawaii Energy's SoLR costs. This will be collected by my supplier (Alaska Energy, say); Alaska will pass the money to the SSEN, who will pass it to Ofgem, who will pass it to Hawaii.

How much extra costs are added for all the extra administration of passing the costs/bills/charges along in this chain?