Quarterly cap change proposed

Chrysalis

GingerTim said:

Martin's not happy about it

https://twitter.com/MartinSLewis/status/1526124034748035073?s=20&t=oqAywcmUifuLy6gTDyG2Lw

Yep sadly these regulators are not just here for consumers, they always take in the needs of those they regulate as well, an example been that ofcom are now currently allowing inflation busting price rises mid contract on broadband.

Thrugelmir

GingerTim said:

Martin's not happy about it

https://twitter.com/MartinSLewis/status/1526124034748035073?s=20&t=oqAywcmUifuLy6gTDyG2Lw

Everyday you see a different side to people. 

brewerdave

Reading the whole synopsis, seems to me that OFGEM are almost encouraging the remaining suppliers to operate as a a cartel with the proposed penalty applied for switchers !!

Olinda99

wow - i am really surprised at Martin....

anyway, clearly suppliers cannot continue selling electricity at 28p-ish a unit when it costs them more to purchase it.

I am all for helping the suppliers as it is in noone's interest to have more failures.

Quarterly adjustments seem a good idea on the face of it.

victor2

brewerdave said:

I found one part of the OFGEM statement hard to swallow
 "Ofgem's chief executive Jonathan Brearley said: "Today's proposed change would mean the price cap is more reflective of current market prices and any price falls would be delivered more quickly to consumers."
Does ANYONE believe that the energy prices are going to fall by any significant amount ,anytime soon ?

Jonathan Brearley must. Why else would he say that? 

MattMattMattUK

Olinda99 said:

wow - i am really surprised at Martin....

anyway, clearly suppliers cannot continue selling electricity at 28p-ish a unit when it costs them more to purchase it.

I am all for helping the suppliers as it is in noone's interest to have more failures.

Quarterly adjustments seem a good idea on the face of it.

Martin is looking at it from the consumer perspective, certainty for longer, generally quarterly changes would be more likely to benefit the suppliers, especially with the reference period being the previous six months. 

The suppliers who are going to go bust probably already have, those that are still around will likely survive, with the major issue being the corpse of Bulb shuffling along in special administration costing taxpayers billions. 

agentcain

Olinda99 said:

wow - i am really surprised at Martin....

anyway, clearly suppliers cannot continue selling electricity at 28p-ish a unit when it costs them more to purchase it.

I am all for helping the suppliers as it is in noone's interest to have more failures.

Quarterly adjustments seem a good idea on the face of it.

Seeing how the major ones survived and judging from their profits over the last year's, I'm pretty sure they can.

There was no need for consumers to bear any cost of suppliers going bust if ofgem was doing its job properly.

pochase

At first It seems to benefit only the suppliers and not the consumers when you look at it. Nobody stops a company reducing the SVT when the markets are less volatile, so where is the benefit for the consumer you will ask.

But the CAP allows the supplier to keep charging the higher rates, even after their prices have come down. There is no protection for the consumer during the six month the CAP is currently valid, suppliers could make a fortune just keeping up a high SVT price while buying at cheap rates.

With so many of the competition with cheap rates gone bust it is questionable how fast there will be special pricing again, suppliers will try to build up reserves in preparation for the next CAP that forces them to sell with no or small profits or even at loss.

So while there seems to be only benefit for the suppliers, it would also be beneficial for the customers.

Ultrasonic

This is obviously a complicated subject but it is in consumers' interests to avoid energy companies from going bust. Whether those left are at risk of this from the current price-cap approach I have no idea though.

Sea_Shell

Will it be a rolling 6 month average, reviewed every 3 months?

E.g. cap#1 based on JFMAMJ

Cap#2 based on AMJJAS

Cap#3 based on JASOND

and cap#4 based on ONDJFM

That would give more "smoothing" to the rates, I think.