Why does the price per unit of energy cost more for prepayment meters?

MWT

jrawle said:

I am not disagreeing with businesses in general covering their costs. I just feel there should be one government-capped price for energy, and if suppliers then want to apply a discount for DD that's up to them.

The cap has been designed to take all sorts of real costs into account rather than setting an arbitrary figure.

It is impossible to have just one price for the whole country if the costs are different in different regions.

Same goes for payment methods, they do not all incur the same over-heads so why shouldn't the cap reflect that too?

Gerry1

MWT said:

jrawle said:

I am not disagreeing with businesses in general covering their costs. I just feel there should be one government-capped price for energy, and if suppliers then want to apply a discount for DD that's up to them.

It is impossible to have just one price for the whole country if the costs are different in different regions.

It's entirely possible, in exactly the same way that Royal Mail charge the same price for intra regional and inter regional inland letters.

MWT

Gerry1 said:

MWT said:

jrawle said:

I am not disagreeing with businesses in general covering their costs. I just feel there should be one government-capped price for energy, and if suppliers then want to apply a discount for DD that's up to them.

It is impossible to have just one price for the whole country if the costs are different in different regions.

It's entirely possible, in exactly the same way that Royal Mail charge the same price for intra regional and inter regional inland letters.

In the context of the Ofgem cap it is impossible, as by design it is based on all the component costs.

If you want there to be a single cost then you'd have to get the rules changed to allow cross-subsidy instead of reflecting the different costs in the different caps...

Carrot007

Gerry1 said:

Are there any significant costs associated with modern pre-payment meters?  If so, presumably they do not vary with kWh usage, so that would rule out higher kWh rates.

Apart from standing charges and a very limited amount of emergency credit, the supplier is not at risk from bad debts the way that they are with Direct Debit customers who can owe hundreds or even thousands of pounds if they scarper.  Quite apart from the social justice considerations of penalising vulnerable users who are desperately trying to avoid debt, it seems the justification for charging extra started to wane when cash PAYG meters were phased out, and has now completely disappeared with key and smart meters.

Indeed, it could even be argued that consumers with smart meters set to DD should be charged a nominal premium to reflect the higher risk of bad debt compared to those with exactly the same smart meter set to PAYG !

PP meter customers are an automatic loss for suppliers (as a whole) and always have been. Like europe we should just not bother with it.

Why. "At risk" customers that you cannot refuse a top up becuase "I have a baby" and when the guy gets there, while yes there may be a baby it is also a drugs den and they fear for themselves if they do not give more free money and just leave. (Ther eare many other storeys I could share and yes it is probably a small minority abusing it and ruining it for others).

SAC2334

Carrot007 is correct ..Prepay meter s are far more expensive to run . Meter readers are out on call up to 7 pm all the time to try and sort out damaged or vandalised prepay meters .
They are also bypassed much more than any other meter mainly because its so easy to do and even if you re caught there is no real penalty other than a debt to be repaid weekly .
I m retired now but last week I met a Morrisons D.S.Agency worker who said he was finding many prepay meters "wired up " but admitted he did nt even report it .This is happening because meter readers fear some sort of retaliation. Some  of my old team mates never reported bypassed meters and they re still doing it now . This new huge rate rise will get more aand more finding ways to bypass electric meters
I found a video on Youtube this week ( I reported it )  which is still open now showing exactly how to wire up a prepayment meter . Its been on Youtube for 7 years!  and its not been taken down with 235,000 views .Youtube will not remove it 
European Countries will not get involved in these costly prepay meters which is the UK way of debt collection for arrears .They simply cut off supply if someone can t or won t pay . 
Maybe if people can t afford the energy bills they can choose between paying for social media mobile broadband monthly costs or feeling cold

WhoopsIDidItAgainITrolledWithYourHeart

SAC2334 said:

Carrot007 is correct ..Prepay meter s are far more expensive to run . Meter readers are out on call up to 7 pm all the time to try and sort out damaged or vandalised prepay meters .
They are also bypassed much more than any other meter mainly because its so easy to do and even if you re caught there is no real penalty other than a debt to be repaid weekly .
I m retired now but last week I met a Morrisons D.S.Agency worker who said he was finding many prepay meters "wired up " but admitted he did nt even report it .This is happening because meter readers fear some sort of retaliation. Some  of my old team mates never reported bypassed meters and they re still doing it now . This new huge rate rise will get more aand more finding ways to bypass electric meters
I found a video on Youtube this week ( I reported it )  which is still open now showing exactly how to wire up. a prepay . Its been on Youtube for 7 years!  and not taken down with many thousands of views .
European Countries will not get involved in these costly prepay meters which is the UK way of debt collection for arrears .They simply cut off supply if someone can t or won t pay .

But surely it's inhumane to cut off people's energy supply just as we allow anyone with no money to just take something off the shelf and walk out with it because "Hey, I'm poor, deal with it."

Oh wait...