Octopus may not be reimbursed for some SOLR payments

[Deleted User]

Bear in mind that the SoLR special payment is a negotiation with Ofgem. In the case of Avro, I suspect that some of the claim will be offset by the fact that Octopus has gained 580000 customers for nothing when it could have expected to pay up to £5.8M in referral fees.

Presumably, where customer credits are concerned some entity is claiming the pence in the £ payment due from the Administrator of the failed supplier.

Mstty

[Deleted User] said:

Bear in mind that the SoLR special payment is a negotiation with Ofgem. In the case of Avro, I suspect that some of the claim will be offset by the fact that Octopus has gained 580000 customers for nothing when it could have expected to pay up to £5.8M in referral fees.

Presumably, where customer credits are concerned some entity is claiming the pence in the £ payment due from the Administrator of the failed supplier.

And on the current price cap they must be making a reasonable profit?

Wonder what that profit margin is in the price cap now given current energy wholesale prices?

MattMattMattUK

Mstty said:

Dolor said:

Bear in mind that the SoLR special payment is a negotiation with Ofgem. In the case of Avro, I suspect that some of the claim will be offset by the fact that Octopus has gained 580000 customers for nothing when it could have expected to pay up to £5.8M in referral fees.

Presumably, where customer credits are concerned some entity is claiming the pence in the £ payment due from the Administrator of the failed supplier.

And on the current price cap they must be making a reasonable profit?

Wonder what that profit margin is in the price cap now given current energy wholesale prices?

Estimates at the time the cap was announced was 1.3-2.8% EBITDA depending on wholesale price fluctuations over the period until the next review. 

bristolleedsfan

Mstty said:

Dolor said:

Bear in mind that the SoLR special payment is a negotiation with Ofgem. In the case of Avro, I suspect that some of the claim will be offset by the fact that Octopus has gained 580000 customers for nothing when it could have expected to pay up to £5.8M in referral fees.

Presumably, where customer credits are concerned some entity is claiming the pence in the £ payment due from the Administrator of the failed supplier.

And on the current price cap they must be making a reasonable profit?

Wonder what that profit margin is in the price cap now given current energy wholesale prices?

Greg Jackson 9th April on Twitter subject standing charges said  "I’ll publish the costs later (I’m not at laptop now) but the price cap sets the charges at 1.9% profit margin. After octopus’s rebate that’s well below zero margin"

Mstty

So in essence if everything is to believed the SoLR take on these customers at a loss. So there is no money to take on additional customer service staff to service these new customers. So the "moaning" posts about customer service should probably be reminded of this and the only alternative would be an even higher Standing Charge to cover additional Solar costs.

Just thinking out loud above...

MattMattMattUK

Mstty said:

So in essence if everything is to believed the Solar take on these customers at a loss. So there is no money to take on additional customer service staff to service these new customers. So the "moaning" posts about customer service should probably be reminded of this and the only alternative would be an even higher Standing Charge to cover additional Solar costs.

Just thinking out loud above...

Ofgem threatened to force SoLR on suppliers, they did not want to take on the customers as they knew that they would face a period of several months making a loss on them, followed by a uncertain period where they would make low profit, to a loss on them, with the prospect of returning to sustained and reliable profitability only happening in late 2023 or 2024. With Bulb being too big to force on any suppliers and with energy suppliers threatening to challenge SoLR in court Bulb was put into "special administration" expected to cost the taxpayer £2.9-3.2 billion because it needs direct subsidy from the treasury to continue trading.