Got a good 2 year dual fuel switch 12 months ago, can they renage due to current energy costs?

good_thyme

Last September Martin strongly suggested that it was a really good time to switch and fix. We did just that and are so grateful that we did. We are paying £140 per month until September 2023, at the time it was £30 higher than we were used to but of course now it's a crazy low amount. What's troubling us is can EON cancel what's left of this 2 year fix deal citing 'unforseen price rises' or are we safe till next year? As pensioners we would like a degree of certainty.

Also can anyone explain what would happen if we moved house while we have this really low fix, do we take it with us to our new house?

Mstty

I can't see Eon breaking a contract but I don't see them transferring it to a different address.

pochase

I almost said no they cannot, but there is now something in many T&C for fixed tariffs that they are able to to cancel.

From EDF T&C

7.5 We can end our arrangements with you under this contract by giving you written notice except if we are acting under clause 7.6 (in which case, we do not need to give you any notice).

Nothing in this regard has happened yet, and I don't believe it will. This is definitely a very surprising clause, especially if the customer has to pay an exit fee, but the supplier could just cancel.

Moving home is different. Some suppliers still allow you to take your fixed tariff with you, but it is at their discretion and not a right, your tariff is not with you as a person, it is for a property. SO it is up to luck, and probably will be less common the higher the prices get.

What_time_is_it

I would say that they can't do this, but we are now in a widespread energy crisis where predicting anything is increasingly difficult. Who knows where we will be in a few months time.

artyboy

I thought that with fixed term deals, the supplier went out and bought forward dated energy contracts on the wholesale markets (based on predicted consumption of everyone that signed up for a particular deal). So are they really losing any more money here as a result of spot/forward rates subsequently changing?

Although it would certainly be ironic if they were making more profit from me on my cheap fixed rate than they are from people on SVR right now...

Exodi

As with the others above, I'd say close to zero chance they'll cancel a fixed contract mid term.

I'd also say it depends on suppliers whether you can take tariffs with you. EON (Next) for example seem to suggest you can (first line under the title). To be honest, I'm quite suprised about this.

https://www.eonnext.com/help/moving-home

WillPS

artyboy said:

I thought that with fixed term deals, the supplier went out and bought forward dated energy contracts on the wholesale markets (based on predicted consumption of everyone that signed up for a particular deal). So are they really losing any more money here as a result of spot/forward rates subsequently changing?

Although it would certainly be ironic if they were making more profit from me on my cheap fixed rate than they are from people on SVR right now...

They could do that. They certainly didn't have to do that though, and I think they still don't have to (although most of the players of that particular game have gone bust now).

artyboy

WillPS said:

artyboy said:

I thought that with fixed term deals, the supplier went out and bought forward dated energy contracts on the wholesale markets (based on predicted consumption of everyone that signed up for a particular deal). So are they really losing any more money here as a result of spot/forward rates subsequently changing?

Although it would certainly be ironic if they were making more profit from me on my cheap fixed rate than they are from people on SVR right now...

They could do that. They certainly didn't have to do that though, and I think they still don't have to (although most of the players of that particular game have gone bust now).

And frankly so they should - failing to hedge and instead speculate (ie gamble) on spot prices over the duration of a 2 year contract is madness... 

northernstar007

also i have this in my SP fixed term cheap contract and glad i took it now

Electricity

Price guaranteed until	31 Jan 2024
Unit rate	28.62p
Standing charge	20.7p
Exit fee	£30.00
Tariff end date	31 Jan 2024

Gas

Price guaranteed until	31 Jan 2024
Unit rate	8.24p
Standing charge	20.4p
Exit fee	£30.00
Tariff end date	31 Jan 2024

macman

artyboy said:

WillPS said:

artyboy said:

I thought that with fixed term deals, the supplier went out and bought forward dated energy contracts on the wholesale markets (based on predicted consumption of everyone that signed up for a particular deal). So are they really losing any more money here as a result of spot/forward rates subsequently changing?

 Although it would certainly be ironic if they were making more profit from me on my cheap fixed rate than they are from people on SVR right now...

They could do that. They certainly didn't have to do that though, and I think they still don't have to (although most of the players of that particular game have gone bust now).

And frankly so they should - failing to hedge and instead speculate (ie gamble) on spot prices over the duration of a 2 year contract is madness... 

Most of the 30-odd suppliers who went to the wall never had the capital reserves to hedge forward for any length of time. Some were one man-and-a-dog type operations. Anyone remember Iresa?
Ofgem failed to set the entry bar high enough and that was the result.

artyboy

macman said:

artyboy said:

WillPS said:

artyboy said:

I thought that with fixed term deals, the supplier went out and bought forward dated energy contracts on the wholesale markets (based on predicted consumption of everyone that signed up for a particular deal). So are they really losing any more money here as a result of spot/forward rates subsequently changing?

 Although it would certainly be ironic if they were making more profit from me on my cheap fixed rate than they are from people on SVR right now...

They could do that. They certainly didn't have to do that though, and I think they still don't have to (although most of the players of that particular game have gone bust now).

And frankly so they should - failing to hedge and instead speculate (ie gamble) on spot prices over the duration of a 2 year contract is madness... 

Most of the 30-odd suppliers who went to the wall never had the capital reserves to hedge forward for any length of time. Some were one man-and-a-dog type operations. Anyone remember Iresa?
Ofgem failed to set the entry bar high enough and that was the result.

Ah... and once again I fell into the trap of assuming other industries have the same financial operating requirements and regulatory oversight as my own...

Perhaps this then is the energy industry's "2008" moment...