Energy providers' business model

Robint

MattMattMattUK said:

Should a supplier go bust consumers will not lose anything as balances are covered by the SoLR process. However if you pay by credit card you will have lost out as you will have been choosing to pay 7.5-9% more for your energy than people paying by Direct Debit.

Look carefully at ofgem govspeak.  The consumer will be passed on to another competitor and the restructuring cost will be added over time to the standing charge of the new Supplier.  How much this will cost has yet to be estimated yet alone tested.  

FWIW the credit card cost may be added - this rate has to be challenged.  Also if you pay

by debit card there should be zero interest as with other commercial payments  - this has to be challenged

Way too much complacency round here. Stand up for yourselves and fight the thieving sharks

[Deleted User]

Robint said:

MikeJXE said:

Miser1964 said:

The 'suppliers' live or die by juggling long/medium term contracts with the upstream generators and the short contracts they strike with retail consumers.

Those which have gone bust didn't have the arbitrage skills and/or software do do this and were caught in a liquidity crunch when wholesale prices rocketed.

Like the virtual network providers (e.g. GiffGaff) having the software to managing new accounts and billing is key. OVO appear to have the most sophisticated billing software of the 'big six'. OVO's Stephen Fitzpatrick has also played the 'green' card of course, but he's only exploited the opportunity that virtue signalling politicians presented by jumping aboard the climate change scam.

I am not disputing OVO have the most sophisticated billing software of the big six but tell me what are they lacking ?

I have been with OVO for 2 months, moved over from SSE, not my choice. Their website for my account is brilliant. 

OVO have my billing history from SSE for the last 2 years that estimate my usage to be about 850kWh for electricity and 5600kwh for gas. 

Pray tell why as they inform me I am a new customer and must be evaluated as an average user about 2900kWh electric and 24,000kWh gas 

That to me stinks and is purely to increase my Direct Debit

Thanx Mikejxe

Someone else is getting my point

Sorry if I come across as a rant, I dont mince words  and there are many issues involved.  There will be many who will just jog along and pay up.  Your choice. Stay awesome.

IMHO Dont sign up to monthly direct debits controlled by them so dont give these BSPs your money to hold in credit.  Would you put your life savings in these dodgy wheeler dealers?

You are really are a man on a mission. Which bit of ‘all credit balances are 100% protected’ are you struggling to understand? There isn’t a supplier in the land that is asking people to invest their life savings.

Clearly, there has been an issue with your annual gas estimate which can happen. Octopus is pretty spot on with my annual estimates; it bills accurately and CS team members are always polite and helpful: albeit, a little slow to respond.

EssexHebridean

Robint said:

I am trying to be general as my rants concern these Billing Service Providers as a whole, some dozen or so currently survived. Ive got a serious issue with one of the top BSPs but dont want to degenerate into specifics.  These BSP's are still out of control and when things go wrong the poor consumer has very poor response and little redress.

Perhaps if you tell us who your energy supplier is, and what the problem you are having is, someone here might be able to offer some advice around the best way to proceed to resolve it? Ranting tends to alienate people though - and presenting misinformation as fact is always going to get corrected here. This forum is a valuable source of information for a huge number of people, so it’s important that people aren’t led to believe things that simply aren’t true. 

It’s incorrect to say that when things go wrong consumers have no redress - the Energy Ombusdsman Service can be extremely helpful.

MattMattMattUK

Robint said:

MattMattMattUK said:

Should a supplier go bust consumers will not lose anything as balances are covered by the SoLR process. However if you pay by credit card you will have lost out as you will have been choosing to pay 7.5-9% more for your energy than people paying by Direct Debit.

Look carefully at ofgem govspeak.  The consumer will be passed on to another competitor and the restructuring cost will be added over time to the standing charge of the new Supplier.  How much this will cost has yet to be estimated yet alone tested.  

There is no "restructuring cost", balances are covered, all other losses fall on the shareholders who lose their investment and the non-consumer debtors. The costs are known for all current SoLR, though we are wating on how the cost of Bulb will be recovered.

Robint said:

FWIW the credit card cost may be added - this rate has to be challenged.  Also if you pay

by debit card there should be zero interest as with other commercial payments  - this has to be challenged

There is no "credit card cost" there is a cost for not paying via Direct Debit or PAYG. Whether interest is charged is not based on how you pay your energy bill, but if you pay your credit card on time.

Robint said:

Way too much complacency round here. Stand up for yourselves and fight the thieving sharks

It is not complacency, it is understanding. You posted an incoherent rant based on misunderstanding and conspiracy theory, do not be surprised if people do not agree with you.

pochase

Robint said:

MattMattMattUK said:

Should a supplier go bust consumers will not lose anything as balances are covered by the SoLR process. However if you pay by credit card you will have lost out as you will have been choosing to pay 7.5-9% more for your energy than people paying by Direct Debit.

Look carefully at ofgem govspeak.  The consumer will be passed on to another competitor and the restructuring cost will be added over time to the standing charge of the new Supplier.  How much this will cost has yet to be estimated yet alone tested.  

FWIW the credit card cost may be added - this rate has to be challenged.  Also if you pay

by debit card there should be zero interest as with other commercial payments  - this has to be challenged

Way too much complacency round here. Stand up for yourselves and fight the thieving sharks

You are not paying more if you pay by debit or credit card. You are paying less if you pay by direct debit, you get a discount because there is less administration cost involved.

MikeJXE

EssexHebridean said:

Robint said:

I am trying to be general as my rants concern these Billing Service Providers as a whole, some dozen or so currently survived. Ive got a serious issue with one of the top BSPs but dont want to degenerate into specifics.  These BSP's are still out of control and when things go wrong the poor consumer has very poor response and little redress.

Perhaps if you tell us who your energy supplier is, and what the problem you are having is, someone here might be able to offer some advice around the best way to proceed to resolve it? Ranting tends to alienate people though - and presenting misinformation as fact is always going to get corrected here. This forum is a valuable source of information for a huge number of people, so it’s important that people aren’t led to believe things that simply aren’t true. 

It’s incorrect to say that when things go wrong consumers have no redress - the Energy Ombusdsman Service can be extremely helpful.

Good idea but it didn't work for me.

if you look at my previous post I have no answers 

If  I do get any it will be to complain which isn't actually an answer 

Robint

pochase said:

You are not paying more if you pay by debit or credit card. You are paying less if you pay by direct debit, you get a discount because there is less administration cost involved.

Now pay attention at the back, I suffer from apoplexy and it makes me rant and splutter with frustration and I get Groans disease

I, consumer will be charged more by the supplier (but pay the same bill) when using a credit card.  The Supplier will increase his tariff to cover the interest charges levied by the credit card co on a supplier.  When I was in business it was 4-5% - not trivial for sellers. (btw selling on EB inc pnp and pp levy ca 14%). One poster has said that my tariff will be loaded by 7-8%

I have to check this out.

If I pay by Debit Card, the Tariff shouldnt be loaded cos the seller isnt charged AFAIK also tba

pochase

Ofgem sees this different

Direct debit is one of the quickest and easiest ways to pay energy bills. Over 56 per cent of customers pay their energy bills in this way and your supplier may offer a discount if you pay by this method. 

https://www.ofgem.gov.uk/sites/default/files/docs/2019/03/direct_debit_factsheet_feb_2019.pdf

You don't understand. You are not paying more than the normal price. people who use direct debit pay less.

  Customers who pay by standard credit (cash or cheque) pay an additional £254 based on the higher cost for energy companies to serve them. 

Which can be found in the latest cap announcement.

https://www.ofgem.gov.uk/publications/latest-energy-price-cap-announced-ofgem#:~:text=The £4%2C279%20per%20year,bill%20paying%20by%20direct%20debit.

GingerTim

Robint said:

pochase said:

You are not paying more if you pay by debit or credit card. You are paying less if you pay by direct debit, you get a discount because there is less administration cost involved.

Now pay attention at the back, I suffer from apoplexy and it makes me rant and splutter with frustration and I get Groans disease

I, consumer will be charged more by the supplier (but pay the same bill) when using a credit card.  The Supplier will increase his tariff to cover the interest charges levied by the credit card co on a supplier.  When I was in business it was 4-5% - not trivial for sellers. (btw selling on EB inc pnp and pp levy ca 14%). One poster has said that my tariff will be loaded by 7-8%

I have to check this out.

If I pay by Debit Card, the Tariff shouldnt be loaded cos the seller isnt charged AFAIK also tba

If you pay on receipt by receipt by debit card you will also pay the higher rate - it's payment on receipt that activates the higher rate, not what card you use.

You could pay by variable direct debit to clear the balance each month and retain the discount.

MattMattMattUK

Robint said:

pochase said:

You are not paying more if you pay by debit or credit card. You are paying less if you pay by direct debit, you get a discount because there is less administration cost involved.

Now pay attention at the back, I suffer from apoplexy and it makes me rant and splutter with frustration and I get Groans disease

It would generally be regarded as trolling.

Robint said:

I, consumer will be charged more by the supplier (but pay the same bill) when using a credit card. 

You will not receive the "same bill", the tariff is different depending on your payment method.

Robint said:
The Supplier will increase his tariff to cover the interest charges levied by the credit card co on a supplier.

They do not, there are no "interest charges" levied by the "credit card co". The card network will charge interchange fees, the bank will also charge a processing fee.

Robint said:
When I was in business it was 4-5% - not trivial for sellers. (btw selling on EB inc pnp and pp levy ca 14%).

The current fees for SMEs are around 1.4-1.6% depending on transaction type, energy providers will be paying <1%.

Robint said:
One poster has said that my tariff will be loaded by 7-8%

I have to check this out.

You tariff will not be "loaded", there are different tariffs depending on payment method, paying on receipt of bill, either by card, bank transfer, standing order or anything other than Direct Debit or PAYG will mean being placed on a higher tariff. You have not said which energy provider you are with, but as an example the EDF tariff card is linked below which shows you the differences in their rates, all other suppliers are very similar.

https://www.edfenergy.com/sites/default/files/government_energy_price_guarantee_prices._standard_variable_deemed_and_welcome._credit_meters.pdf

Robint said:

If I pay by Debit Card, the Tariff shouldnt be loaded cos the seller isnt charged AFAIK also tba

The cost is the same regardless of whether you use credit or debit card, there is no "loaded", the seller, or in this case the energy provider, they are still charged a fee by the bank and card networks.