Energy price cap to rise to £2,800 in October: OFGEM Chief Exec

Uxb1

Snag is this sort of thing s leading to in effect HMG subsidizing the price of energy.  What next? food.

Any such payouts via the benefits system to the needy and not so needy has to be paid for by someone.
Either by way of more taxation on the rest of the population who now have even less to spend in the economy or if it's borrowing then the end result is the £ goes down... and everything imported starts to get expensive for everyone...including of course energy. So you end up chasing your own tail in a form of gov debt spiral

This sadly is the route (Gov subsidies to satisfy some sector of the population) that many of the disaster economies of the world go down, and we all know how they end up

Ultrasonic

Uxb1 said:

Snag is this sort of thing s leading to in effect HMG subsidizing the price of energy.  What next? food.

Any such payouts via the benefits system to the needy and not so needy has to be paid for by someone.
Either by way of more taxation on the rest of the population who now have even less to spend in the economy or if it's borrowing then the end result is the £ goes down... and everything imported starts to get expensive for everyone...including of course energy. So you end up chasing your own tail in a form of gov debt spiral

This sadly is the route (Gov subsidies to satisfy some sector of the population) that many of the disaster economies of the world go down, and we all know how they end up

This is why in my posts above I referred to support targeted to the most in need whilst for many what is needed is a reduction in energy use and other expenditure. We can't all expect the government to somehow magically 'fix' this. 

Alnat1

I agree Ultrasonic. There are too many people who are struggling but really just need some good advice on how to use their heating and hot water systems more efficiently.

Maybe energy companies should contact customers on E7 tariffs who are using many more day than night units to see if they would be happier with a single rate

barker77

Just noticed octopus have octopus tracker v3 which has elec at approx 22pkWh and gas at 5.8kWh. 

If that’s available and doesn’t fluctuate too far that seems amazing 

stuarta99

QrizB said:

This is an interesting video where the presenter makes the case that we should be paying less for our gas at this moment in time.

Some of us *are* paying less for our gas.
People who want a tariff that tracks the wholesale price up and down can join Octopus and choose their Tracker tariffs. Most people however seem to prefer paying the same price every day.

I have tenants that can afford to put on £15 a week. One example is a single mum that has been regularly beaten by her previous boyfriend and she has two children. Living on benefits. No parents to turn to for help.
So what do we do for her?

You could reduce her rent, it's entirely in your gift to do so.

(I have tenants and I waived their rent for three months during 2020 when they couldn't work due to lockdown.)

Does appendix A give you any clues as to why the Ofgem prediction is so different from yours?

Ofgem seem to think wholesale prices for May/June.July will continue to be as high as they were in April. The figures I'm using suggest otherwise. We won't know until the October cap is published in August.

However the statement in the letter:

... forward prices for this winter, which the level of the next price cap is based upon, have continued to be exceptionally high and volatile.

... seems, if taken at at face value, to be at odds with the declared method of calculating the cap which is that it relates to prices that applied during February to July. Prices for the coming winter shouldn't really come into it, at least not in October. (When the new January cap is announced, of course, that's another matter, and next April could be unpleasant too.)

That's the big gamble on what Jan and April brings although just reread Martin's update

'the price cap prediction for October has risen sharply to £2,790/year on typical use (and to £2,818/year in January)'

So it seems a January rise is predicted and in reality, they aren't going to drop as quick as they have risen and I guess if anything they will flatline for a while.

bristolleedsfan

barker77 said:

Just noticed octopus have octopus tracker v3 which has elec at approx 22pkWh and gas at 5.8kWh. 

If that’s available and doesn’t fluctuate too far that seems amazing 

Currently has a product cap of 40p kWh E - 11p kWh Gas

https://energy.guylipman.com/sm/gastracker - 

https://energy.guylipman.com/sm/electracker

Wholesale prices are regarded as volatile - Gas KWh rate expected to increase month on month

Spoonie_Turtle

barker77 said:

Just noticed octopus have octopus tracker v3 which has elec at approx 22pkWh and gas at 5.8kWh. 

If that’s available and doesn’t fluctuate too far that seems amazing 

I didn't know about that before, thanks - the only tariffs that come up as options for me through the usual 'change my tariff' route are fixes at over 41p/kWh.  Interesting.

QrizB

barker77 said:

Just noticed octopus have octopus tracker v3 which has elec at approx 22pkWh and gas at 5.8kWh. 

If that’s available and doesn’t fluctuate too far that seems amazing 

I might have mentioned it a handful of posts upthread
Tracker V3 changes daily. It is currently capped at 11p/kWh for gas and 40p/kWh for electricity, so you know how high it could possibly go. Plus Octopus say they will let you switch from Tracker to Flexible (the Ofgem-capped SVT) at any time if you ask them.

stuarta99

Interesting statement for Octopus Energy

Thrugelmir

agentcain said:

MattMattMattUK said:

wrf12345 said:

Ofgem keeps saying it is looking after consumers but in reality it is making sure the energy companies can recover all the money they have lost in the past year or so, so even if the costs of electric and gas do not go up they will still let them raise rates. If consumers cut back on usage then even higher standing charges will be allowed to force low users to pay for previous losses.

Ofgem is looking after the consumers, otherwise there would be no cap. It has also been demonstrated that it is not in the consumer's interest for the suppliers to go bust, 1)because the majority of the costs of balances need to be recovered via the standing charge. The energy providers do not make a profit on the standing charge, it is there to cover fixed costs (network, base provision, SoLR, social etc.). 2)The higher standing charge is not used to force anyone to pay for previous losses, it is used to cover the cost of the new provider giving the SoLR customers their credit balances. It also does not penalise low users, it applies network costs to everyone, which is the fair way to do it, if people do not want to pay network costs then they need to not use the network.

wrf12345 said:

The energy companies want the government to give consumers free money to pay for this so that consumers do not realise the extent to which they are being ripped off, whereas the government should be encouraging low use by outlawing standing charges (which would give everyone a £250-360 boost) and perhaps using the bloated green taxes to reimburse the companies (and scaling that back once energy prices go down again).

The energy companies do not want a situation where customers are in debt, or defaulting on bills, that is expensive and difficult to deal with. The government has multiple ways to tackle that, or not, the choice is political. 3)It is likely that none of the energy providers will make a profit this financial year, they might make a small one next. 4)This crisis demonstrates exactly why we need a huge investment in non-fossil fuel energy, something which the green levy does. Outlawing standing charges would be idiotic as it would mean that the network costs would need to be recouped elsewhere, so additional unit rates, it would also mean that medium and higher users would be subsiding lower users which makes no sense either. 

wrf12345 said:

The industry is trying to panic the govn into giving consumers free money, no-one is standing up for the poor old consumer.

There is no such thing as free money, the "industry" is not trying to panic anyone, the Ofgem statement was only made because they were summoned to the HoC committee and told to make a statement that included their best guess of the October rise. 5)I am sure the industry does not want to be forced to sell below cost, no business would, but many energy suppliers accept that profit will be negligible for another year or two, they are aiming for survival. 

5) The industry no, but utilities should not be run for profit to begin with, so this industry shouldn't even exist in its current form. Again, government's fault. Really doubtful if energy suppliers are aiming for survival when you're referring to the Big 6 suppliers. 

Even a state run enterprise cannot be run to breakeven. As will provide no funding for future investment or unexpected costs. Nationalisation isn't the answer. State enterprises by their very nature are inefficient. As end up as unaccountable entities that lack a commercial focus.