Why is no one asking "Who sets the prices?"

jj_43

Q - Are credit balances currently secured.

Yes, Ofgem has made arrangements for this. When a supplier fails, Ofgem will prefer to appoint a new supplier that will honour the credit balances, at no cost to other customers, it's the ideal result. Given they are being handed a large bunch of customers for free it may be a small price for the new supplier to pay to gain customers.

In other cases the new suppliers can recover the cost of securing credit balances from an industry levy, which ultimately is added onto everyones bill.

Chrysalis

jj_43 said:

Q - Are credit balances currently secured.

Yes, Ofgem has made arrangements for this. When a supplier fails, Ofgem will prefer to appoint a new supplier that will honour the credit balances, at no cost to other customers, it's the ideal result. Given they are being handed a large bunch of customers for free it may be a small price for the new supplier to pay to gain customers.

In other cases the new suppliers can recover the cost of securing credit balances from an industry levy, which ultimately is added onto everyones bill.

So this stuff is in place right now? No more recovering credit balance losses from others?  

Perhaps you can clarify the last line if it means recovering the balances via the levy.  If it does mean that then Ofgem have not yet fixed this problem.

I perhaps should have added verbosity to my question, it means are the balances secured so they will never ever need to be recovered via levies.

wild666

sienew said: On a personal level, reduction in consumption where possible is of course by far the best way to save money.

But people can only cut down so much before it becomes impossible for them to save more. After that it will mean turning off appliances like the fridge, freezer, router, which will affect the connection speed and in some cases medical equipment that needs to be in stand by mode. 
Personally my night time usage, 18:00 to 05:30 is around 1 kWh with just the fridge, freezer and router on 24/7 come October I will be looking to decrease my daily usage, currently 4.2 kWh per day by as much as possible but the lowest I would possibly drop my usage is by about 2.3 kWh by going out all day come rain or shine. 

MattMattMattUK

Chrysalis said:

The media seems intentionally dumbed down in this country.

Think of all the following questions that could be asked.

Q - If wage increases cause a inflation spiral then why do France and Germany have much higher wage inflation than us but lower cost inflation.  (proves that wage inflation spiral is a myth).

It does not prove that wage inflation is a myth, it has actually been demonstrated multiple times in real world situations that it happens. Both have increasing wages, both still have wages increasing less than inflation. The issue during this current economic situation is that for most countries around the world the inflationary pressure is almost entirely external, it is due to increases in the costs of energy and food and the knock on impact that has on product and service costs. In the UK around 6% of our 12% inflation is due to Brexit, that is why our inflation is higher than the inflation in the EU. Also we have house price inflation, which will be further fuelled by wage increases, where as most EU countries are seeing flat or even declining housing markets, so large levels of wage increases in the UK would be inflationary due to the impact on housing. It does not mean wages cannot increase, but it does mean that those increases have a wider economic impact.

Chrysalis said:

Q - Why are we only storing 1% of gas as reserves vs 33% in Germany and over 100% in Austria.

Historically since the start of North Sea gas we did not for many decades need gas storage to cover more than short term blips as production far exceeded supply and we were exporting gas. We also only had one large scale facility (Rough) which was shut down due to being commercially unviable in the era of low prices and narrow margins.

Chrysalis said:

Q - Why do we allow energy to be traded on the open market

It is a global market, with exploration and extraction run by private companies. The UK government, chosen by the electorate, decided that they did not want to be taxed to allow the state to invest in energy production. We could have been like Norway and kept exploration, extraction and production in private ownership, or we could have been like France and built 70+ nuclear power plants, but we did not want to pay for that.

Chrysalis said:

Q - Is there any plans to regulate the energy market (not just the suppliers who are selling us energy that have already paid a lot for on the market)

No, we do not have the power to regulate a global marketplace. If the government wanted to it could build a lot of capacity itself, but the population are not willing to pay the taxes required to do that, so they will not.

Chrysalis said:

Q - What is ofgem's mandate.

On their website.

Chrysalis said:

Q - Why is ofgem allowing energy companies to recuperate their losses faster and ignoring human rights impact when setting their cap.

They are not allowing them to recoup their losses, they are allowing them to sell at a very narrow profit margin, around 2.2%. Making a 2.2% profit is not a human rights issue.

Chrysalis said:

Q - Are credit balances currently secured.

They are guaranteed under the SoLR system, they are not in separate accounts. 

Chrysalis said:

Q - What is the breakdown of the circa 4.5 billion annual revenue of standing charges expenditure, (where does the money go).

Available on the Ofgem website. 

Chrysalis said:

Q - Should parent companies of energy suppliers be taken into account when considering their allowed profit. Centrica vs British Gas for example.

No.

Chrysalis said:

Q - What plans are been actioned for long term energy supply owned by the state given its clear privatisation has failed.

I would not say that privatisation has failed, but elements of our current system are certainly not working in the way many want them to. As to what plans there are, none.

Chrysalis said:

Some tv news presenters are clearly angry and asking some ok questions, but the media is still very light touch and insular on the type of questions they ask in particular there seems to be a lack of comparing us to other countries which could stumble ministers.

Mostly the media are asking the wrong questions and leading with the wrong headlines because the public do not want to learn and be informed. Anger and tantrum sells more newspapers, generates more clicks and gets more viewers. Most other countries are in a similar situation. France is used as an example where bills have "only gone up 4%", which is true for the cost at the plug, but ignores the tens of billions of Euros the French government is having to inject into EDF to keep it going, so the French are paying for their energy via taxation as well as by bills, but the public are thinking if the French only have a 4% rise then why are we having prices more than double, without knowing the full information or even having the ability to understand it.

[Deleted User]

Chrysalis said:

I perhaps should have added verbosity to my question, it means are the balances secured so they will never ever need to be recovered via levies.

Think of consumer credit protection as a bit like whole life insurance. All consumers pay for it, but only some get any benefit from it when the supplier goes bust. Without this insurance, energy consumers would be unsecured creditors and could expect to get back pennies in the £.

Should suppliers be made to hold all consumer credits in escrow? Many people now argue that they should (including Ofgem I think) but escrow is not a no cost exercise. Consumers would have to pay more for it as suppliers will need to borrow more to run their business: for example, all suppliers pay their wholesalers in advance of supply. No supplier is waiting 3 months for a statement!

Personally, I prefer the airline model. When an airline is set up, it applies for an Air Operator’s Certificate, and an Operating Licence. For the latter, the operator has to specify how many passenger seats there will be on their fleet of aircraft. The operator then lodges an insurance-backed bond with the CAA based on the number of passenger seats to cover airline failure; recovery flights etc. If the airline wants to increase the size of its fleet (and seat numbers), it effectively applies for a new Operating Licence and it places a higher bond.

pochase

When people talk about France it seems they are also forgetting that the gas prise was in December 2021 already 9.9cent, that is 8,5p when it was around 4p in the UK.

This was a price cap up to end of June 2022, which has been extended to end of the year.

BUFF

MattMattMattUK said:

France is used as an example where bills have "only gone up 4%", which is true for the cost at the plug, but ignores the tens of billions of Euros the French government is having to inject into EDF to keep it going, so the French are paying for their energy via taxation as well as by bills, but the public are thinking if the French only have a 4% rise then why are we having prices more than double, without knowing the full information or even having the ability to understand it.

& now EDF France is suing the French govt for ~£7 billion for losses incurred last year by being forced to sell energy below cost.

MattMattMattUK

BUFF said:

MattMattMattUK said:

France is used as an example where bills have "only gone up 4%", which is true for the cost at the plug, but ignores the tens of billions of Euros the French government is having to inject into EDF to keep it going, so the French are paying for their energy via taxation as well as by bills, but the public are thinking if the French only have a 4% rise then why are we having prices more than double, without knowing the full information or even having the ability to understand it.

& now EDF France is suing the French govt for ~£7 billion for losses incurred last year by being forced to sell energy below cost.

A case which will not get to court because the French government is in the process of buying out the remaining part (16%) of EDF that it does not already own (84%). 

BUFF

I know, it's an interesting situation though I think that you will agree?

Chrysalis

MattMattMattUK said:

Chrysalis said:

The media seems intentionally dumbed down in this country.

Think of all the following questions that could be asked.

Q - If wage increases cause a inflation spiral then why do France and Germany have much higher wage inflation than us but lower cost inflation.  (proves that wage inflation spiral is a myth).

It does not prove that wage inflation is a myth, it has actually been demonstrated multiple times in real world situations that it happens. Both have increasing wages, both still have wages increasing less than inflation. The issue during this current economic situation is that for most countries around the world the inflationary pressure is almost entirely external, it is due to increases in the costs of energy and food and the knock on impact that has on product and service costs. In the UK around 6% of our 12% inflation is due to Brexit, that is why our inflation is higher than the inflation in the EU. Also we have house price inflation, which will be further fuelled by wage increases, where as most EU countries are seeing flat or even declining housing markets, so large levels of wage increases in the UK would be inflationary due to the impact on housing. It does not mean wages cannot increase, but it does mean that those increases have a wider economic impact.

Chrysalis said:

Q - Why are we only storing 1% of gas as reserves vs 33% in Germany and over 100% in Austria.

Historically since the start of North Sea gas we did not for many decades need gas storage to cover more than short term blips as production far exceeded supply and we were exporting gas. We also only had one large scale facility (Rough) which was shut down due to being commercially unviable in the era of low prices and narrow margins.

Chrysalis said:

Q - Why do we allow energy to be traded on the open market

It is a global market, with exploration and extraction run by private companies. The UK government, chosen by the electorate, decided that they did not want to be taxed to allow the state to invest in energy production. We could have been like Norway and kept exploration, extraction and production in private ownership, or we could have been like France and built 70+ nuclear power plants, but we did not want to pay for that.

Chrysalis said:

Q - Is there any plans to regulate the energy market (not just the suppliers who are selling us energy that have already paid a lot for on the market)

No, we do not have the power to regulate a global marketplace. If the government wanted to it could build a lot of capacity itself, but the population are not willing to pay the taxes required to do that, so they will not.

Chrysalis said:

Q - What is ofgem's mandate.

On their website.

Chrysalis said:

Q - Why is ofgem allowing energy companies to recuperate their losses faster and ignoring human rights impact when setting their cap.

They are not allowing them to recoup their losses, they are allowing them to sell at a very narrow profit margin, around 2.2%. Making a 2.2% profit is not a human rights issue.

Chrysalis said:

Q - Are credit balances currently secured.

They are guaranteed under the SoLR system, they are not in separate accounts. 

Chrysalis said:

Q - What is the breakdown of the circa 4.5 billion annual revenue of standing charges expenditure, (where does the money go).

Available on the Ofgem website. 

Chrysalis said:

Q - Should parent companies of energy suppliers be taken into account when considering their allowed profit. Centrica vs British Gas for example.

No.

Chrysalis said:

Q - What plans are been actioned for long term energy supply owned by the state given its clear privatisation has failed.

I would not say that privatisation has failed, but elements of our current system are certainly not working in the way many want them to. As to what plans there are, none.

Chrysalis said:

Some tv news presenters are clearly angry and asking some ok questions, but the media is still very light touch and insular on the type of questions they ask in particular there seems to be a lack of comparing us to other countries which could stumble ministers.

Mostly the media are asking the wrong questions and leading with the wrong headlines because the public do not want to learn and be informed. Anger and tantrum sells more newspapers, generates more clicks and gets more viewers. Most other countries are in a similar situation. France is used as an example where bills have "only gone up 4%", which is true for the cost at the plug, but ignores the tens of billions of Euros the French government is having to inject into EDF to keep it going, so the French are paying for their energy via taxation as well as by bills, but the public are thinking if the French only have a 4% rise then why are we having prices more than double, without knowing the full information or even having the ability to understand it.

I wasnt asking the community for answers but saying these questions need to be asked, but in terms of your answers.  They would be amusing if the situation wasnt so serious.  Think about it, wages are only a small part of a business expense, if inflation rises first (which it has done in this case), and wages rise to match so workers merely are not getting poorer, its not going to make the inflation never ending as is currently claimed, you even said yourself the inflationary causes are external.  The data for France, Germany and other western European economies are cold hard figures, they have more than double wage inflation, yet lower cost inflation.  These are cold hard numbers. Facts are facts.

On your answers it effectively is in short we tried to do things on the cheap because the right wing press machine convinced uneducated voters the tax cuts (which the rich mostly benefit from) was the way to go.  As an example of how easily people are misled, we had a population voting for Brexit which is akin to Turkeys voting for Christmas, and we have Truss telling people the following tax cuts will help with the cost of living.

NI Rise been cancelled (£60 annual saving for min wage, less than £200 saving for median wage, £1800 saving on PM salary, £0 saving for those who dont pay tax, aka the poorest).
Cancellation of Corp tax rise, no help at all on cost of living, I mean !!!!!!.
Increase of marriage allowance tax threshold. !!!!!!.
Inheritance tax reduction. !!!!!!
Cancellation of green levies, £150 saving, however not confirmed if energy suppliers will be forced to pass on the saving or its just assumed/hoped they will.

Telling people we not doing things because we voted/asked for it is an interesting reply, as the population for the most part does what its told to do via the media (my mother is constantly telling me XX is that, YY is this because the daily mail told her so).  Likewise when you say the media is dumbed down because the population dont want to be educated, its the other way round.  Do you have a poll which says people asked to have dumbed down news?