Quarterly cap change proposed

Ultrasonic

Mstty said:

Ultrasonic said:

Don't try and explain our guilt to match your non guilt.

I did no such thing. I was just giving a different perspective.

EssexHebridean

I've switched about for years to get the best price, but honestly, I'd never really thought of the SOLR process in that way, and particularly not in terms of credit being protected. I knew that nobody was about to let consumers see the lights go out if a supplier failed, sure, but that's much the same as being confident that if choose to do my weekly shop at Aldi rather than Waitrose the food will still be just as safe to eat! 

Ultrasonic

EssexHebridean said:

I've switched about for years to get the best price, but honestly, I'd never really thought of the SOLR process in that way, and particularly not in terms of credit being protected. I knew that nobody was about to let consumers see the lights go out if a supplier failed, sure, but that's much the same as being confident that if choose to do my weekly shop at Aldi rather than Waitrose the food will still be just as safe to eat! 

Even for those unaware of the SOLR process it indirectly still influenced behaviour. I say this because if the SOLR protection didn't exist then I'm confident the advice here and elsewhere would have been heavily caveated regarding the risk of switching to small/new suppliers.

BobT36

Ultrasonic said:

EssexHebridean said:

I've switched about for years to get the best price, but honestly, I'd never really thought of the SOLR process in that way, and particularly not in terms of credit being protected. I knew that nobody was about to let consumers see the lights go out if a supplier failed, sure, but that's much the same as being confident that if choose to do my weekly shop at Aldi rather than Waitrose the food will still be just as safe to eat! 

Even for those unaware of the SOLR process it indirectly still influenced behaviour. I say this because if the SOLR protection didn't exist then I'm confident the advice here and elsewhere would have been heavily caveated regarding the risk of switching to small/new suppliers.

So if we don't switch to small/new suppliers to get a better "deal" (at great risk one way or another, evidently..) then what is the point? If it's going to be a bloody cartel anyway then it may as well just be state run. 

Clearly the "competition" was fake, and I didn't really see much "innovation" either. The only real thing we're left with is the outcome that once again, profits are privatised, losses are socialised..

Ultrasonic

BobT36 said:

Ultrasonic said:

EssexHebridean said:

I've switched about for years to get the best price, but honestly, I'd never really thought of the SOLR process in that way, and particularly not in terms of credit being protected. I knew that nobody was about to let consumers see the lights go out if a supplier failed, sure, but that's much the same as being confident that if choose to do my weekly shop at Aldi rather than Waitrose the food will still be just as safe to eat! 

Even for those unaware of the SOLR process it indirectly still influenced behaviour. I say this because if the SOLR protection didn't exist then I'm confident the advice here and elsewhere would have been heavily caveated regarding the risk of switching to small/new suppliers.

So if we don't switch to small/new suppliers to get a better "deal" (at great risk one way or another, evidently..) then what is the point?

Not quite with how that was a response to what I wrote? The SOLR process did exist (and still does) and so it made complete sense for consumers to switch to new/small suppliers where they were offering cheaper rates (and to be advised to do so by people here and elsewhere).

markin

A fairer way to do it would be a compulsory insurance policy, The smaller/riskier the company the higher the premium, just like car insurance.

If top up meters were standard, costs would be cheaper and we could all just top up at the post office, or Tesco online, no need for a direct debit card reader on it, so i would guess 15% savings and no more need for call centers, and 70 CEO's

agentcain

Section62 said:

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.

Claims what?  The debts, the pension liabilities, expensive forward contracts, and leases on rented offices?

agentcain said:

I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

False equivalence.

The 'common good' could be served by having a diverse range of energy suppliers that compete against each other for customers and offer different (and innovative) products that meet the diverse needs of consumers.  Admittedly it is going to take a while before we see anything like that again.

So basically you're saying that the private energy providers offer no benefit whatsoever. They have zero assets, no investments, no real estate, no ownership. Their profits go to private pockets, never to be seen again 

And that's better than nationalisation how? Just because every cowboy can become an energy supplier?

wild666

pochase said:

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?

If people didn't get any credit back from failed suppliers then I suspect that more people would ask for credit back if it built up whether it was winter or summer they wouldn't want a supplier holding onto a large credit. 
We could see a return to people paying bills when they are produced every month or three months whichever the case may be.

MattMattMattUK

agentcain said:

Section62 said:

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.

Claims what?  The debts, the pension liabilities, expensive forward contracts, and leases on rented offices?

agentcain said:

I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

False equivalence.

The 'common good' could be served by having a diverse range of energy suppliers that compete against each other for customers and offer different (and innovative) products that meet the diverse needs of consumers.  Admittedly it is going to take a while before we see anything like that again.

So basically you're saying that the private energy providers offer no benefit whatsoever. They have zero assets, no investments, no real estate, no ownership. Their profits go to private pockets, never to be seen again 

And that's better than nationalisation how? Just because every cowboy can become an energy supplier?

Their profits are taxed, with profits then distributed via dividend, with many of the shares in the larger providers held by pension schemes, money does not disappear. 

There is no need for nationalisation, if the government really wanted to set a ceiling the easiest way would be to create a state energy provider and then anyone who could undercut them could, any company that could not would go bust. Nationalisation is never an answer by default, it has benefits in some sectors, it has negatives in others. The cost of nationalising the energy infrastructure in the UK would be hundreds of billions of pounds, something which I very much doubt the taxpayer has the appetite to pay for. When there are ways to improve the system with little cost to the taxpayer those should be taken first, rather than some ideological drive for nationalisation. 

[Deleted User]

wild666 said:

pochase said:

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?

If people didn't get any credit back from failed suppliers then I suspect that more people would ask for credit back if it built up whether it was winter or summer they wouldn't want a supplier holding onto a large credit. 
We could see a return to people paying bills when they are produced every month or three months whichever the case may be.

The Law of Unintended Consequences would then come into play. One of the key drivers for smart metering is that suppliers pay their wholesalers 30 minutes after supply. By delaying consumer bills to 3 months in abeyance, it is likely that suppliers would have to charge consumers higher prices to cover the borrowing cost for the money that they would use to pay their wholesalers. With inflation at 9% this is probably not a good time to reduce supplier cashflow.

A more sensible alternative would be variable monthly payments in advance of supply. It would achieve the same outcome for the consumer (ie; no build up of credit) but it would allow a supplier cashflow to pay its wholesaler/s.

PS: Of note, in its recent announcements on market stabilisation, Ofgem made no recommendations on future consumer credit protection (ie, escrow). I suspect that Ofgem took fright at the cost of imposing this on suppliers.