Energy news in general

MattMattMattUK

Chrysalis said:

MattMattMattUK said:

debitcardmayhem said:

If the cap fits https://www.bbc.co.uk/news/articles/cy5r190y3kko

Reading the comments on that article show just how uneducated the general public are, which we often see on here as well. One has to wonder if there is any way that the energy suppliers and/or the government could win with the general public, it seems that even if energy was given away for free the general public would then start complaining that they were not paid to use energy. 

On the anger aimed at Ofgem, its justifiable, they have been awful.  Not just in the decision making, but also promoting bad ways of presenting energy costs such as averaged out annual cost instead of plain unit rate and standing charge.  

I am not really sure what decisions they have made have been awful, I agree they have not been perfect, but with the government doing nothing to help and a public who seem to have zero appetite to pay for their energy supply their juggling act is always going to involve dropping some balls. 

I agree that the headline "average user" figure is not helpful, but they had to do something as there were complaints that the standing charge and unit rates were "too difficult to understand", something which we regularly see on here. They do not hide the standing charge and unit rate so anyone with the intelligence to understand them can still use those figures as they are on both the suppliers and Ofgem's websites. They are between a rock and a hard place when it comes to trying to explain things to stupid people.

Chrysalis said:
So its a mixture of people not understanding things, and bewilderment of who Ofgem is supposed to be there for, most consumers typically rightly or wrongly see a regulator there to protect them, not the companies they are regulating..

Ofgem as the regulator has protected consumers as far as their remit allows, they "protected" the balances of those who gambled on cowboy suppliers, they had no ability to control those cowboy suppliers more than they did before they all went bust and the customers fell into the SoLR process because their remit from government did not give them control over finances of suppliers. Ofgem forced suppliers to sell below cost for nearly a year, that is very pro-consumer and incredibly anti-business. They introduced SVT and capped sales price and profit on those, again pro consumer. 

Chrysalis said:

On the energy cost of side of things, it is also understandable people are not happy that higher costs have become normalised. 

The costs are what they are because of Russia invading Ukraine and the UK having failed to invest in energy generation and networks for many decades. It has nothing to do with things being "normalised" and everything to do with the cost of provisioning that service.

Chrysalis said:

Again looking at communications, what actual plan is there for all this stuff to be fixed, and has it been communicated out in a good way to the wider public?  

What do you mean by "fixed"? If you mean building enough generation capacity and upgrading the network then yes, there is a plan and yes, it has been communicated, many times. If you mean "energy supply reduced below cost" then no, there is not a plan for that, nor will it happen.

Chrysalis said:
Or is Ofgem e.g. satisfied as long as the supplier margins are within an acceptable rate on regulated tariffs.

That is part of their mandate, so yes they will continue to do that. Considering that non-SVT tariffs are almost always cheaper that is the way the market should function.

Chrysalis said:

The way to win is to bring energy costs down substantially (for everyone not just a couple of zones) and improve the regulator's performance. 

How do you propose to bring costs down in any meaningful way? Realistically the only way that can be done is if there was huge government subsidy, I do not see any appetite for that from any party involved, the regulator, the suppliers, taxpayers or government. What you propose is not a win, it is a loose loose situation. 

Chrysalis said:

As before this will be my only post to avoid a political exchange.

It does not have to be political, it does have to be workable. 

The key issue with all of this seems to be the dividing line which arises again and again. On one side there are those who are prepared to pay for the service they receive and would like to see investment to make sure the lights stay on. On the other side is those who keep demanding that "someone else" should pay for everything, including their energy. The former is a reasonable position, the latter is not.

Gerry1

MattMattMattUK said:

Ofgem as the regulator has protected consumers as far as their remit allows, they "protected" the balances of those who gambled on cowboy suppliers, they had no ability to control those cowboy suppliers more than they did before they all went bust

That's not very fair, before the crisis consumers were continually being urged to Switch & Save by MSE, Which? and many consumer columns and programmes; it was almost your civic duty to switch. At one point Ofgem were even toying with the idea writing to everyone who had not switched in the last three years, urging them to do so ! Two big factors were allowing so-called Fixed DDs rather than Variable DDs (Pay Whole Bill) to become the norm, and allowing the average FDD balance to rise well above zero.

Originally the FDD idea was that you were in debit half the time and in credit for the other half, so it all 'came out in the wash'. Ofgem allowed suppliers to let this drift up so that consumers were always in credit, indeed some companies have even made it part of their Ts&Cs. 'Front Room' companies ended up with cash mountains which they used to fund their businesses Ponzi-style until the decks of cards collapsed. The blame for this lies not with consumers following all the advice to keep switching but with Ofgem's failure to regulate effectively.

wrf12345

To be fair to Ofgem, now they now present the region caps, both s/c and unit rate, in a form that can be clearly understood, whereas before you needed  a calculator to work things out. However, their remit seems to be to keep the bloated energy retailers in easy money rather than force efficiency into the retail market by progressively narrowing margins between wholesale and retail prices and they will not be forgiven for the still outrageous levels of the standing charges. Ofgem have also massively increased their workforce and the hundreds of thousands a year the top guys earn shows no reflection of the way consumers have been poorly treated.

Chrysalis

MattMatt you know I cant answer your questions, its a bit odd we have a thread allowing discussion of a political tool (Ofgem) but no politics discussion is allowed, perhaps moderators can chime in here to confirm if this thread is exempted from that rule or not?

MattMattMattUK

Chrysalis said:

MattMatt you know I cant answer your questions, its a bit odd we have a thread allowing discussion of a political tool (Ofgem) but no politics discussion is allowed, perhaps moderators can chime in here to confirm if this thread is exempted from that rule or not?

It largely boils down to one very simple question which underpins nearly all of the issues. Do you think that you (and me) should pay for the energy and network you use, or you think that someone else should pay? 

masonic

Chrysalis said:

MattMatt you know I cant answer your questions, its a bit odd we have a thread allowing discussion of a political tool (Ofgem) but no politics discussion is allowed, perhaps moderators can chime in here to confirm if this thread is exempted from that rule or not?

There is no ban on discussing the activities and actions of government departments, be that Ofgem, HMRC, councils, etc. What is banned is the promotion or attack of political parties or ideologies. What is being discussed here transcends party politics and directly affects our everyday lives and ability to save money on our bills, so it should not be a problem to discuss.

mmmmikey

It's easy to criticise Ofgem but you only have to look at the debate that rages on around things like standing charges to realise how challenging their role is. As well as representing customers in dealings with suppliers they also have to protect customers from themselves and make decisions based on hard data, facts and long term and not emotion, self-interest and a desire for lower prices today regardless of what's best in the long term.

And we have a lot to thank them for too:

* Consider all the posts we see where people are paying sky high rates above the cap, and it is explained that they are on a business tariff which is why they are paying so much more. We would all be paying those rates if it wasn't for Ofgem.

* If your supplier becomes un-competitive and you want to change, you can click a few buttons on your computer on a Sunday evening and be with a new supplier by Wednesday morning, which drives down prices by keeping the market competitive.

* If you are unable to change, for example because you have arrears or don't understand the system - or even if you just can't be bothered - you pay the same SVR that millions of other customers that are on that tariff by choice. The default tariff for trapped customers is exactly the same for those that could move if they wanted to and were able to. The suppliers can no longer exploit that situation.

In summary, yes, there will always be different views on individual decisions and chances are if you think Ofgem are terrible because of this, the chances are that someone else will actually think that's one of their strong points. A balanced view is needed - IMHO polarised thinking has become a national disease and unless we think an organisation is perfect and support all their decisions they are considered to be a complete failure. We need to get out of that mentality and start making more reasoned decisions (or we're doomed Captain Mainwaring, doomed..... )

The_Green_Hornet

MattMattMattUK said:

Chrysalis said:

MattMatt you know I cant answer your questions, its a bit odd we have a thread allowing discussion of a political tool (Ofgem) but no politics discussion is allowed, perhaps moderators can chime in here to confirm if this thread is exempted from that rule or not?

It largely boils down to one very simple question which underpins nearly all of the issues. Do you think that you (and me) should pay for the energy and network you use, or you think that someone else should pay? 

Yes that is a very simple question - one which I see a lot on the energy forum - and most people would agree with your often repeated answer that people should pay for the energy and network they use. However, at the moment, that is not exactly true.

Another simple question is who should be paying for the social and environmental policy costs that have been loaded onto the standing charge over the years?

Personally, I believe that the standing charge should revert back to it's original purpose of covering the fixed costs of supplying energy to someone's property and that social and environmental policy costs should be moved to the relevant government departments and paid through general taxation.

With Ofgem now consulting on whether wealthier households should pay a higher standing charge than poorer ones our energy bills are becoming more like an extension of the tax and benefits system.

Scot_39

Read any analysis into the failed suppliers to date and it will tell you what you need to know about whether Ofgem is a truly competent regulator or not.

The fact they have intervened at Tomato some might see as them improving.  

The fact thst they allowed Tomato to enter the market in the first place - others might argue suggests they have learned little from their past failures.

Tomato might well survive, it may find a cash injection from investors that arguably should always have been a requirement to ensure stabilith in a volatile marketplace, it may up its prices to realistic true market levels, it may make mord of all of its customers hold credit balances to finance their energy purchases  - so focus on prepay or annualised DD - not on MVDD if offer or standard credit if offer (paying after consumption).

EDIT
Or judging by the first comment in the Tomato poll thread - they may actually just bill their current customers properly.
https://forums.moneysavingexpert.com/discussion/comment/81421928/#Comment_81421928
Reportedly no bills since Sep 24
And another now in same thread thrm taking no money by DD for 2-3 months
https://forums.moneysavingexpert.com/discussion/comment/81422189/#Comment_81422189
Only 4 votes working OK, 4 votes not to some degree and 2 replies not taking any money.

But those of us who paid for SoLR are tired of subsidising those who benefitted by and saved at such firms.

If you want to deal with such suppliers - that's upto you - but should be on the clear understanding - your choice your risk not others - i.e. the 10 million plus homes that couldn't or didn't switch that SoLR bailouts saw Ofgem load £100+ onto their bills.

Ildhund

The_Green_Hornet said:

Personally, I believe that ... social and environmental policy costs should be moved to the relevant government departments and paid through general taxation.

How do you think a Venn diagram of (general taxpayers) | (electricity consumers) looks? There is usually only one consumer per household, but often more than one taxpayer. There are doubtless many households with no taxpayer at all. What further cuts beyond WFP and PIP should DWP make to be able to afford to pay for the Warm Home Discount, for example?

Add in questions of business energy consumption and corporation tax and the whole thing becomes completely impenetrable.