Quarterly cap change proposed

markin

The cap was to stop profiteering on those who don't fix, Its no longer fit for that in this new world, It should be changed to a profit cap tracker, every 30min or hourly.

The Cap was only meant to be a temporary measure anyway while they find a fix.

Ultrasonic

agentcain said:

Ultrasonic said:

BobT36 said:

Why not let them all go bust? 

Well personally I'd still like to have someone to buy electricity and gas from...

The state?
If no one's there to sell, the state claims everything for the common good and becomes the middleman, even if it means that ofgem and the administrators have to actually do something useful. 
I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

If you want the consumer energy supply system to be nationalised then the way to do this is not to steadily wait for private companies to go bust...

Whether a nationalised system would be better is far from obvious to me though.

EssexHebridean

Before people lambast Martin for not supporting the change, the text of his “apology” to ofgem makes interesting reading. I’ve seen it on FB - I won’t copy and paste it to here as I’m not convinced the rules allow. Definitely worth looking there though - I believe he has also threaded the full thing on Twitter, if so read the whole thread not just tweet 1. He makes some good points. 

Sea_Shell

So back in early 2021, when the April cap for that period was announced, was it tied directly to the wholesale prices in the same way that it is now?    BUT, providers were offering deals below that figure, as they thought (hoped, believed) that they could buy their customers energy at a cheaper rate?

So IF that is no longer going to be allowed, then how do we ever get competition back into the Energy market?   Should we?  Is it a failed model?

Going forwards, what's the point of having umpteen suppliers, all offering basically the same priced product, where the only real differences are going to be to their on-line platforms, apps and customer services?

wrf12345

Prepayment meters (with no standing charge) that can directly read debit cards and tied to the national grid rather than the energy providers would save circa 40 percent of the bill albeit at the price of paying the direct and variable wholesale rate for gas and electric. Basically eliminating the middle men and making Ofgem redundant (I assume the poor old consumer is financing Ofgem via their bills).

Martin Lewis apologized for his rant at Ofgem but it was a rare moment of honesty regarding an organization that has no real interest in protecting consumers as illustrated by their £100 increase in standing charge for electric and the way it was not included in the initial announcement nor directly obvious in subsequent press releases - a four billion quid theft from energy consumers! It is also completely at odds with Green thinking, causing a massive percent increase in the bills of low energy users (and those with solar panels).

pochase

So your solution instead of increasing the standing charges would have been for customers of failed suppliers to lose their money and to fight for themselves to find a new supplier?

MWT

Sea_Shell said:

So back in early 2021, when the April cap for that period was announced, was it tied directly to the wholesale prices in the same way that it is now?    BUT, providers were offering deals below that figure, as they thought (hoped, believed) that they could buy their customers energy at a cheaper rate?

So IF that is no longer going to be allowed, then how do we ever get competition back into the Energy market?   Should we?  Is it a failed model?

Going forwards, what's the point of having umpteen suppliers, all offering basically the same priced product, where the only real differences are going to be to their on-line platforms, apps and customer services?

The cap is based on energy purchases made on the spot market, which traditionally would be the most expensive way to buy energy so it acted to limit the most expensive type of energy supply contracts for those who did not switch and did not consider fixed deals.

That left the suppliers free to compete with the cheaper fixed and at least theoretically, hedged, longer term contracts.

If we get back to a market that once again prices long term contracts below spot market purchases then we will see fixed tariffs below SVT again, but probably not soon...

Chrysalis

Sea_Shell said:

So back in early 2021, when the April cap for that period was announced, was it tied directly to the wholesale prices in the same way that it is now?    BUT, providers were offering deals below that figure, as they thought (hoped, believed) that they could buy their customers energy at a cheaper rate?

So IF that is no longer going to be allowed, then how do we ever get competition back into the Energy market?   Should we?  Is it a failed model?

Going forwards, what's the point of having umpteen suppliers, all offering basically the same priced product, where the only real differences are going to be to their on-line platforms, apps and customer services?

Pretty much yeah, we had suppliers gambling on future changes to the wholesale cost.

I have not heard of anything thats going to ban that practice, but there is always a possibility some rule changes might come in intended to reduce the risk of speculation and not running on sufficient cash reserves.

It was never real competition anyway, real competition would be wholesale level competition, from people who actually produce the energy, rather than resellers.

Mstty

This may be a bit controversial but I am going to air it anyway.

We were a household with a protected credit under the SoLR protection we received when Symbio went bust.

Personally we took a gamble on Symbio, they were small but offered us a great kWh electricity rate.

Energy has been so cheap for decades. We changed supplier every year, chased the very best fixes price and factored in cashback and referral deals and energy was one of the cheaper DD's on our household budget spreadsheet. It was always going to come crashing down at some point and we knew the gamble we were taking with Symbio. Little did we know our gamble would end up being paid for by everyone else. As per another thread to the tune for dual fuel customers of £310-330 a year in SC alone!!!!!!

It doesn't sit well with us so the amount we had in credit with Symbio we have donated to suitable charities. Hoping it gets to those most affected by our greed for cheap energy.

pochase

You should mention that the £310 was for a prepaid account. Standing charges for prepaid are around 15p per day higher (5p electricity and 10pm gas) than credit accounts. That is £55 more than a credit account in the same region. 

But that still leaves Standing charges of over £20 per month for dual fuel, more £6 plus are for the SOLR, with no final say for how long.