Energy news in general

Gerry1

debitcardmayhem said:

Gerry1 said:

stripling said:

Some countries just have tiered pricing - everyone gets the first X amount of KWhs at the low rate, the next amount of Kwhs over that is at a higher rate and if you use even more Kwhs you pay top $ per Kwh for the number of KWhs that exceed the 2nd tier.  So high users are billed at 3 rates.

unsnipped from end of quote

It means everyone has a fair base line and it helps to encourage energy thrift. 

That'll go down really well with impoverished seniors who don't get pension credit and have lost their Winter Fuel Allowance but have high usage because they are at home all day.

Especially when they realise they're being penalised to subsidise affluent second home owners.

Not all high users are second home owners nor affluent , we are not impoverished, nor second home owners, but due to medical conditions we use a lot of energy. 

I have unsnipped the end of the quote for fairness, but I couldnt see where it said affluent……

I've never suggested that all high users are second home owners and/or affluent.

But there will be some seniors who just fail to qualify for benefits and have high usage that they can't easily reduce.  If we have Cheap, Normal and Expensive bands then they are likely to struggle.  And of course, some seniors are very comfortably off and won't even notice or care how much they're paying.  People aren't all the same.

Similarly, some properties use much more energy than others and some of the relevant parameters may be difficult or impossible to change, e.g. latitude, solid granite walls, high ceilings, hilltop site etc.

Some second home owners are likely to have low usage if their properties are often left unoccupied.  They are likely to benefit if their usage remains in the Cheap band.

Block Tariffs would often be an example of the Law of Unintended Consequences.  If users need to be subsidised or penalised it should be targeted via general taxation, not crude tampering with energy bills.

Scot_39

Gerry1 said:

stripling said:

Some countries just have tiered pricing - everyone gets the first X amount of KWhs at the low rate, the next amount of Kwhs over that is at a higher rate and if you use even more Kwhs you pay top $ per Kwh for the number of KWhs that exceed the 2nd tier.  So high users are billed at 3 rates.

That'll go down really well with impoverished seniors who don't get pension credit and have lost their Winter Fuel Allowance but have high usage because they are at home all day.

Especially when they realise they're being penalised to subsidise affluent second home owners.

or the 1.5m more homes with solar to lower their electricity import

Scot_39

Lets not forget their are iirc from the discretionary £300 quarterly payments at crisis peak - over 8m on means tested benefits in the UK.  Not even sure if that included sub 2m elderly on PC.  And even if did - that

Its not an age thing

Ofgem as it makes clear in todays updated proposal - has not been immune in it's decisions to implement social policy and liberal media policy pressures - like the most recent example it mentions on prepay rate levelisation charges could arguably fall under both.  As could older policy cost contributions to likes of GBIS and the debt special allowance etc.

There are no simple answers and no one size fits all.

If you feel as strongly as I do about their current proposals - then like last time - individuals are allowed to respond.

stripling

@Scot_39
Like the c1.5m homes with solar or around c 0.7-1m plus depending on source - second home owners who's properties used e.g. as holiday homes - that are empty most days / weeks of the year.

I hear you, for sure. In the UK, middle-class solar and battery owners benefit enormously (which is not 'a bad thing') . I guess their resources help grid balancing to a degree. I do think that kit should be more accessible - it is interesting to me that Demand-side flexibility is proposed when a battery in every home would solve the same issues of peak demand times. [To be clear, I have neither batteries nor solar.]

However, my experience of tiered pricing is from Spain and it worked fairly well.  High-users because of age or health are exempted from the higher rates - it's certificated by doctors. So that's not a problem. It meant that everyone could afford at least enough for day-to-day living. To me that's fundamental. 

I'm opposed to the benefit argument (although I 'get' your logic) because our benefit system is cruel and punitive and it could so easily get cut for spurious political reasons or for not filling the right form or whatever. That fear underpins daily life, it's awful particularly as a large percentage of 'benefit' claimants are actually in low paid work. 

But privately owned solar in Spain is not the same as here, partly because Spain has a lot of flats and Solar is on rooftop on blocks and shared and unless that's changed recently, there are no 'feed-in' tariffs. Also, because social security is not punitive - there's not the finger pointing mentality that exists here courtesy of some media [😏] plus there's a general belief that poor people should be helped. But they still have contributory benefits - you pay high NI in part towards unemployment.

Holiday homes should not be paying domestic electricity rates imo whether rented out or not. But for 2nd homes it wouldn't be too hard to link them to the first home via land registry numbers and include the two in usage levels. 

As for gas.... that too needs addressing you are right, except right now, ramping up gas prices would really slaughter low income people. This is why I keep saying our energy market is broken. 

To tell you the truth I don't know what the answer is. I do know that other European countries have block pricing in various forms - it is something, along with these other 'grid issues', I'm interested in. 

michaels

I love your plan - it will see heat pumps being torn out to be replaced by gas, oil and LPG - win all around

MattMattMattUK

stripling said:

@QrizB

If benefits are too low, increase them (and increase taxes to balance the books). DESNZ shouldn't be using Ofgem to redistribute wealth.

I would suggest that "helping the poorest" is the job of the Welfare State, not of the energy regulator.

I wouldn't object to a tax rise but unfortunately that doesn't work - in the UK it would be opening the door to sanctions, cuts and thus no energy. A bit like US healthcare insurance being linked to your job - lose your job, lose your healthcare with horror stories of people being thrown out of hospital mid treatment etc. Look at all the wrongful benefit cuts cases that get turned over in court a year later. 

Many countries have variations on social tariffs or KWh rates banded by consumption with a base-line of basic use and also exclusions from the higher cost energy bands for the seriously disabled or sick. 

Energy poverty is a very real thing and it is fundamental that as our energy market is rapidly being reshaped and our patterns of consumption are being forced to change, we build an inclusive, decarbonised energy system. This is both for fairness and for want of a better way of putting it, to impede social discontent and possible negative political consequences in the future.

Editing to add this from the BBC article: 
"

• "A block system in which customers pay a lower unit rate until a certain amount of energy is used, and a higher price thereafter."

  This is similar to some other European countries and imo is the fairest. Although it really is time that Ofgem shifts some of the charges onto gas and removes a few altogether. 

Many countries do, but on every economic level social tariffs are a bad thing. As others have said if benefits are too low then increase them, but messing with pricing in different sectors, creating subsidy within sectors and messing with market economics is bad, worst of all for those involved it can be stigmatising, it also creates cliff edges where even a few hours overtime one month ends up costing a person hundreds. Social tariffs are an appallingly bad idea. 

michaels

MattMattMattUK said:

stripling said:

@QrizB

If benefits are too low, increase them (and increase taxes to balance the books). DESNZ shouldn't be using Ofgem to redistribute wealth.

I would suggest that "helping the poorest" is the job of the Welfare State, not of the energy regulator.

I wouldn't object to a tax rise but unfortunately that doesn't work - in the UK it would be opening the door to sanctions, cuts and thus no energy. A bit like US healthcare insurance being linked to your job - lose your job, lose your healthcare with horror stories of people being thrown out of hospital mid treatment etc. Look at all the wrongful benefit cuts cases that get turned over in court a year later. 

Many countries have variations on social tariffs or KWh rates banded by consumption with a base-line of basic use and also exclusions from the higher cost energy bands for the seriously disabled or sick. 

Energy poverty is a very real thing and it is fundamental that as our energy market is rapidly being reshaped and our patterns of consumption are being forced to change, we build an inclusive, decarbonised energy system. This is both for fairness and for want of a better way of putting it, to impede social discontent and possible negative political consequences in the future.

Editing to add this from the BBC article: 
"

• "A block system in which customers pay a lower unit rate until a certain amount of energy is used, and a higher price thereafter."

  This is similar to some other European countries and imo is the fairest. Although it really is time that Ofgem shifts some of the charges onto gas and removes a few altogether. 

Many countries do, but on every economic level social tariffs are a bad thing. As others have said if benefits are too low then increase them, but messing with pricing in different sectors, creating subsidy within sectors and messing with market economics is bad, worst of all for those involved it can be stigmatising, it also creates cliff edges where even a few hours overtime one month ends up costing a person hundreds. Social tariffs are an appallingly bad idea. 

Which is why they are bound to happen - that and they are basically redistribution that is not on the government books in terms of tax and spending measures mean that politically they are a no brainer. 

Scot_39

stripling said:

@Scot_39
Like the c1.5m homes with solar or around c 0.7-1m plus depending on source - second home owners who's properties used e.g. as holiday homes - that are empty most days / weeks of the year.

However, my experience of tiered pricing is from Spain and it worked fairly well.  High-users because of age or health are exempted from the higher rates - it's certificated by doctors. So that's not a problem. It meant that everyone could afford at least enough for day-to-day living. To me that's fundamental. 

To tell you the truth I don't know what the answer is. I do know that other European countries have block pricing in various forms - it is something, along with these other 'grid issues', I'm interested in. 

If you look at the graphs in the Feb 20 Ofgem's latest call for responses / consultation document - you will see that both their single rate and rising block tariff as used in Spain - both produce significantly higher bills even at moderate - let alone median TDCV - let alone higher users in more cases than not.  In £100s in some cases - so not trivial amounts.

Completely defeating the reason many charities wanted the SC scrapped for poorest households - many being high users. They I suspect all wanted the £330 average removed from bills completely - Ofgem making it clear their is no wriggle room - and they have no funding support from govt to do so - e.g in the form of social tariffs.

Shuffling deckchairs on the titanic - given the disaster that now sees over 2 million homes are in arrears / bad debt situations - moving from SC to unit rate - does not deliver that sort of saving.

To tell you the truth I don't know what the answer is either - for the poorest - but I am content with the status quo.  

My gripe about high energy standing charges - and the high and growing network costs behind them - is with our net zero "remote" from demand renewables approach - and the £bns pa in transition costs due to it - and the £bns in curtailment costs due to the bad planning of it - not with the billing mechanism.

But from 2 sets of those graphs in Feb 20 documents - I know that what Ofgem are proposing - is not the outcome many probably wanted to help many of our poorest.

mmmmikey

Back billing in the news today:

BBC News - Ofgem demands action from energy firms over back billing

https://www.bbc.com/news/articles/c5yxwyp4jwvo

What are your thoughts on this? The impression I have formed from this forum is that the majority of back billing complaints we see here arise more from confusion over the rules rather than malpractice by the suppliers.

MattMattMattUK

mmmmikey said:

Back billing in the news today:

BBC News - Ofgem demands action from energy firms over back billing

https://www.bbc.com/news/articles/c5yxwyp4jwvo

What are your thoughts on this? The impression I have formed from this forum is that the majority of back billing complaints we see here arise more from confusion over the rules rather than malpractice by the suppliers.

I agree, there seems to be a perception that back billing is a get out of jail free card for not paying bills. I have seen whole groups crop up on Facebook saying that because of back billing as long as you refuse to pay your energy bill for a year the supplier cannot enforce payment, people do not understand that it has conditions, the way things work with payments already made etc. Weirdly the ombudsman keeps refusing to publish the number of complaints that are actually upheld, as well as the number of complaints that are entirely unreasonable in the first place.