Energy news in general

MattMattMattUK

Chrysalis said:

Of course we also both disagree on Ofgem's way to handle the market.  I think they have excessively dumbed it down to try and help people who dont understand billing and also people who cant budget, thats nothing to do with energy costs, just bad regulation.  It has ended up making things worse as we have people getting confused why their bill is higher than the cap, why their DD is going, questions about quotes based on an estimated annual consumption.  Just keep it simple daily charge and unit rate. 

The headline "average user" figure is published, but so are the unit rates and standing charges, so yes the figure used in media headlines is dumbed down, but if anyone wants so are the other figures, so the simple figures you want are already there, however their is a group of people who are either unwilling or unable to understand that and there is little a regulator can do about that.

Chrysalis said:
A dodgy payment system used by millions, unsecured credit balances, suppliers being allowed to set a repayment rate on prepay for debt without any kind of affordability check, you also seemed at odds of when I made the comment about being on the side of consumers, 

It is not in consumers interest for the lights to go out, Ofgem is required by it's mandate to consider both sides, keeping energy supply viable and keeping costs as low as reasonable (hence the very slim margins). 

Chrysalis said:
an example of them being very concerned for the suppliers  is ofgem allowing a part of the SC to cover energy debt (according to you 11% of bills), this is just really weird and regulators dont normally do this, instead its a case of tough luck, recover via the courts, thats what an open private market is. 

The reason that exists is because energy suppliers are not allowed to use effective methods to recover debts, they operated with both hands tied behind their backs. They must continue to supply non-payers, they have to wait at least six months before they can start the recovery process and in general, with court backlogs it takes 18 months to obtain a CCJ, by which time the non-payer has disappeared. In no other sector operated on a commercial basis apart from water are suppliers required to continue to supply non-payers. Tesco will not let you take food you do not pay for, your mobile phone or broadband will be cut off, your car insurance will be cancelled etc. and those suppliers are also allowed to take enforcement action much quicker. The reason that allowance exists is because they suppliers are not allowed to make effective debt recovery. 

Chrysalis said:
If the suppliers were liable for unpaid bills, then they would of course not let debt balances get so high.  

Sure some suppliers have not been great (the recent example of one fruit based supplier who has still not billed many customers after more than a year), but equally the majority are required to follow Ofgem's rules which attempt to juggle the limit customers not getting into excessive debt or excessive credit, which over seasons is quite hard to do when many customers do not plan properly. That directive for Ofgem comes from government, so they have to follow it.

Chrysalis said:
The portion of the SC used for debt is effectively a fixed direct debit tax, it has become easily the most expensive form of payment if it needs that kind of subsidy. A better choice would be to add 11% to bills only if paying by fixed DD, not there for pre pay or variable DD, this then is a strong encouragement for people to shift to other ways of paying.  Prepay is no debt at all, variable DD might be one or two months at worst assuming the supplier is on the ball.  I will stop it there.

I agree it would make more sense, or just move everyone to variable DD or even pre-pay, I have no issue with either of those options, but the majority of people would be apoplectic due to lack of understanding.

MattMattMattUK

Chrysalis said:

We also have two governments who said they would work on it, so people are naturally going to want to hold them to account.

When, realistically, have governments we have ever consistently done what they said they would? I agree it would be nice to be able to hold the government to account, but that has not happened for nearly eighty years so I doubt it will start happening now.

HillStreetBlues

masonic said:

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.

I have seen threads closed or posts removed when talking about political decisions, but moderation is very inconsistent. 

MattMattMattUK

Chrysalis said:

There is costs associated with policies and decisions that have been made. 

The difficulty, as above, is separating what is actually policy, some things are easy, the social subsidy for example, network upgrades are not policy costs, but some people regard them as such.

Chrysalis said:

Also consideration some suppliers are owning infrastructure via sister/parent companies.

They are, but that really is not an issue as there has to be a clear separation and no cross subsidy. They operate in the same market as others and so cannot artificially inflate prices, nor collude to do so. 

Chrysalis said:

Finally I dont mind paying higher taxes for this stuff, except I have an issue with the idea of privatising profits and socialising losses for companies that have paid out billions to shareholders.  But ultimately I dont have an issue with higher taxation, and paying for my own energy.

It is good that you support paying higher taxes, I do and in circles where political discussion I regularly state that view, I think everyone, including me, should be paying higher taxes. I do not however feel I should be subsidising someone's energy bills via the energy billing system, that assistance, if required, should be delivered via the benefits system. 

Scot_39

Gerry1 said:

Chrysalis said:

Think of all the money the government has thrown away e.g. in recent NI tax cuts.

Perhaps I've missed something, but wasn't there a big rumpus recently because the rate of employers’ NICs increased from 13.8% to 15%, from 6 April 2025, and the level at which employers start paying NICs (the secondary threshold) has also been reduced from £9,100 to £5,000 per year?

It's estimated that these changes will increase employers' payroll costs by about 2%.

Ref to personal I Suspect - employee not employer NI.

So reference to ni threshold increase to match it pa at £12570  and the last 2 2% rate cuts in Jan and Apr.

That saved median wage workers iirc over £100 net per month over 2 years and cost the treasury iirc something  in region of £30bn plus pa combined across the 27m workforce.

2% might be average for all employers or based on ft median  but suspect those businesses with 100s or 10,000s at or near min wage, and many part timers  like big retail and hospitality chains will be far worse.

A part time worker on UK aver 16 hrs (ONS says slowly creeping up and recovered from covid dip last data c16.3)  -

old min wage - 11.44x16x52 = £9518, so NI -9100 = 418x13.8% = £57  (subject to other allowances and exclusions on combined payroll helping smaller employers more iirc in past avoid paying  - now ?)

From Apr 25
New min wage - £12.21x16x52 = 10158  NI - 5000 = 5158x15% = £773  pa - (the core being £615 - 15% of £4100 threshold change)

773 - 57 = 716  cf 9518+57+285 (say 3% min AE Emplr Pension) = 716/9860 = 7.3% 

Add like the before now 11606 vs 9860 = 17.7% increase

Not to dissimilar from the 16% min wage rise for 18-20 year olds who are  exempt from employers NI (class M under 21, 0 rate below c£50k pa).

Which is why those sectors trade bodies have been even more vocal since budget.

Auti

I am enjoying reading these posts and they have helped my understanding of how the system works behind the scenes. For me I have seen just statement of fact about rules and regulations energy companies follow and their consequence. I am of the opinion if you have the ability to use energy you pay (sc) and also pay for energy consumed - it can be hard work on small income but it can be done just maybe people don’t want to compromise on the lifestyle they believe they should have.

MattMattMattUK

A fairly good example of what can happen to any energy network even in an advanced economy, but especially one that has experienced decades of underinvestment. 

Huge power cut causes chaos in Spain and Portugal as trains, traffic lights, and payments hit.
https://www.bbc.co.uk/news/live/c9wpq8xrvd9t

Gerry1

MattMattMattUK said:

A fairly good example of what can happen to any energy network even in an advanced economy, but especially one that has experienced decades of underinvestment. 

Huge power cut causes chaos in Spain and Portugal as trains, traffic lights, and payments hit.
https://www.bbc.co.uk/news/live/c9wpq8xrvd9t

Ah, the joys of the cashless society...

Could it be the same thing that's broken Marks & Sparks?

Makes one wonder how we'd cope and whether it's such a good idea to switch off the only broadcasting system that can cover the entire UK with only three transmitters.

Scot_39

Well we're turning off PSTN and leaving many homes with phones that need power.  Now 2027 was this year - some exchanges already switched.

So don't expect continuity of universal coverage is a major concern for many in power.

MattMattMattUK

Gerry1 said:

MattMattMattUK said:

A fairly good example of what can happen to any energy network even in an advanced economy, but especially one that has experienced decades of underinvestment. 

Huge power cut causes chaos in Spain and Portugal as trains, traffic lights, and payments hit.
https://www.bbc.co.uk/news/live/c9wpq8xrvd9t

Ah, the joys of the cashless society...

Could it be the same thing that's broken Marks & Sparks?

Makes one wonder how we'd cope and whether it's such a good idea to switch off the only broadcasting system that can cover the entire UK with only three transmitters.

There is not a lot of choice, no one makes the valves anymore so it would but hugely expensive to set up production again. Most radios these days are not battery anyway with streaming apart from cars most households would have way of receiving a signal. 

I have been cashless for nearly seven years now and it has never been an issue. Additionally if there is a power cut nearly all shops will shut anyway so it becomes an irrelevance. 

Scot_39 said:

Well we're turning off PSTN and leaving many homes with phones that need power.  Now 2027 was this year - some exchanges already switched.

So don't expect continuity of universal coverage is a major concern for many in power.

It is not really an issue, during a major power power outage mobile networks would last for about six hours then things would start going down, but thr PSTN network would only last a few hours as well and in many cases much of it is already no longer PSTN and has not been for a decade.

If it was out the best advice for most people would be to stay at home and read a book.