Standing charges rip off

Tranboy

Hurrah.

By 2050 we will have 7 new nuclear power stations.

Unfortunately by 2030 all but 1 of the existing stations will be decommissioned.

 

Guess we'll all be sitting in the cold using candles for 20 years until we can fill the power gap.

GingerTim

https://twitter.com/EnergyUKcomms/status/1509840022610092033?t=YagEGT4b9UVztsOCKF7B5A&s=19

Tonberry

The cost of Bulb's failure alone is about £3bn (and rising), and there are 25 other smaller companies which have gone bust too. All of that cost is shared among the other energy companies via a mutual fund which is added to the standing charge.

The system is a complete mess. It was never designed to deal with what has happened over the last 12 months and Ofgem have totally failed to oversee a stable and efficient market. Part of that is government policy - the energy companies cannot charge more than the price cap and so are all working at a loss right now - and part of it is a system which allowed anyone to set up an energy company with the profits going to the owners, and any failures being picked up by the rest of the market, essentially a one way bet.

Anyway, as for the costs involved from taking on customers from a failed supplier....

Costs of moving all the accounts over (admin costs).
Costs of buying the energy for these customers - remember they are selling at a loss as the price cap is lower than the wholesale price.
Cost of honouring any credit balances customers had with their previous supplier.
Cost of dealing with any issues and complaints.
Cost of communicating with new customers to inform them of what is happening.

All of these can be reclaimed from the fund. When customers were profitable it wasn't such a big deal, but customers are all loss making right now, so it's a real problem. Energy companies are subsidising the consumers to the tune of £10's of billions which will all have to be recovered when wholesale prices come down again or the cap goes up.