Price Cap

KevBond

Why is all the talk about increasing the price cap?
With energy companies making obscene profits, rather than impose a windfall tax why is there talk of reducing the price cap, this would surely reduce the profits (which everyone seems to want), whilst reducing the cost to customers based on what they use.
Also wish they'd stop report the cap in terms of monthly cost, this is the result of how much energy is used, the cap needs to be in the context of unit cost so people realise they'll pay for what the use rather than assume they won't pay more than "£300/mth". 

[Deleted User]

The talk about increasing the price cap is because energy companies AREN'T making obscene profits. They're capped at 2% and will go out of business if forced to sell energy at less than it costs them to buy.

pochase

KevBond said:

Why is all the talk about increasing the price cap?
With energy companies making obscene profits, rather than impose a windfall tax why is there talk of reducing the price cap, this would surely reduce the profits (which everyone seems to want), whilst reducing the cost to customers based on what they use.
Also wish they'd stop report the cap in terms of monthly cost, this is the result of how much energy is used, the cap needs to be in the context of unit cost so people realise they'll pay for what the use rather than assume they won't pay more than "£300/mth". 

For example Octopus makes a profit of around £12 per customer per year. Is that really obscene? And they have to pay taxes on the profits.

So we take away the £1 per month. and the monthly direct debit can come down by £1 per month. How much does that help against the increasing wholesale market prices. And why should a supplier stay in the market if they are not allowed to make money, only to lose money?

Astria

KevBond said:

Also wish they'd stop report the cap in terms of monthly cost, this is the result of how much energy is used, the cap needs to be in the context of unit cost so people realise they'll pay for what the use rather than assume they won't pay more than "£300/mth". 

You'll be surprised by the amount of people that don't understand how gas and electric works - you'll just confuse them by saying it's 50p/kWh - I've had that conversation before. It usually starts with "What's a killowatt?" followed shortly by "blah blah, I don't care, I'll just use less and then pay less.", so saying the average bill is going up by X makes sense. You can figure out the unit prices if you are interested in them.