Energy providers' business model

MikeJXE

pochase said:

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.

Thank you for that link, I copied it

What you can expect from your supplier:

 Information on how your direct debit is calculated

Your supplier should clearly explain this. All suppliers must take all reasonable steps to ensure that your direct debit payments are based on the best available information, for example, on how much energy you have used. If you are an existing customer, your payments will be based on energy use over the previous year with adjustments if there have been any price changes. If you are a new customer, the payments will be based on a number of factors including previous meter readings and the number of rooms and/or the number of people living in the property.

Information on why your direct debit needs changing and by how much

If your payments need to change, your supplier must explain why. If they need to be increased you will also be notified at least 10 days in advance. However, if you don’t understand why your payments are increasing don’t be afraid to contact your supplier and ask for an explanation.

That  explains everything NOT

So why is my direct debit based on average user when 

I am a one person in a 2 bed flat EPC B

OVO have sight  of my last 2 years bills that equate to a low user 

I have emailed them spoken to to them and they do not listen 

Robint

MattMattMattUK said:

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.

Thats the whole point about restructuring cost,  the company has gone bust no money in the bank, no assets other than a consumer list. Another competitor is paid by Ofgem to take over the accounts and their balances are transferred but there are significant costs involved with insolvency.  Experts will know how this works but that cost will be debited to the consumers as a supplement to the new suppliers standing order = brushed under the carpet

Now how incoherent is that

As you say Bulb is a political football yet to find its own goal - we shall see how it falls on voters. Will they amortise this cost over 1 year, 10 years?  If you change providers once you have consumed your balance and move to fresh fields  hmm

Watch this space

BTW  energy costs have multiplied 3x 4x , so has the Govs VAT takes why isnt someone having a rant about that. I cant take on a second battle front

BTW its been asked why I dont name and shame my Supplier - well there are clever bots around that will pick up on negative media impact like this ere.  I dont want to bring down all their trolls on my head they are pretty vicious and will spoil our spirited discourse with uber media crap to totally discredit this important topic

Power on (if you can afford it)

Robint

BTW FYI the aggressive bean counter is Kaluza - see what you can find out about them.  They are involved in EV charging stations, BP Pulse and others etc  and EDF (which doesnt seem to work properly I hear? is this true)

I also heard that their system can accommodate variable direct debit monthly payments as per their EV system.  More lying from PBS's.   If these wheeler dealers wore blue cat suits I'd cheerfully hang them out by their tails to dry - splutter

MattMattMattUK

Robint said:

MattMattMattUK said:

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.

Thats the whole point about restructuring cost,  the company has gone bust no money in the bank, no assets other than a consumer list. Another competitor is paid by Ofgem to take over the accounts and their balances are transferred but there are significant costs involved with insolvency.  Experts will know how this works but that cost will be debited to the consumers as a supplement to the new suppliers standing order = brushed under the carpet

Now how incoherent is that

That last paragraph was fairly incoherent and demonstrated that you really do not understand insolvency or SoLR.

Robint said:

As you say Bulb is a political football yet to find its own goal - we shall see how it falls on voters. Will they amortise this cost over 1 year, 10 years?  If you change providers once you have consumed your balance and move to fresh fields  hmm

Watch this space

It will not fall on voters, but on household energy bills, there is come cross over but they are not one and the same. In all liklihood it will  be added to standing charges and current estimates are it will be recovered over three years, but it could be over two or five, we will not know until the minister makes the decision and informs Ofgem. Using up a balance and/ changing supplier will make no difference.

Robint said:

BTW  energy costs have multiplied 3x 4x , so has the Govs VAT takes why isnt someone having a rant about that. I cant take on a second battle front

We all need to pay more tax, tax rates should be higher. The government subsidy currently costs around £10 billion pcm, the other measures introduced will cost around £45 billion over two years, the VAT on energy bills raises around £3.4 billion per year. The battle is against those who think that "someone else" is the one who should pay for everything, those who expect greater subsidy.

Robint said:

BTW its been asked why I dont name and shame my Supplier - well there are clever bots around that will pick up on negative media impact like this ere.  I dont want to bring down all their trolls on my head they are pretty vicious and will spoil our spirited discourse with uber media crap to totally discredit this important topic

Power on (if you can afford it)

No one has said "name and shame" your supplier, people are just curious as to what you think they have done that started this rant off. Your posts are not going to have a media impact, nor do they have troll armies to being down on you, you are an irrelevance to them other that potentially taking up time annoying their customer service people. 

The "important topic" you talk of, you are doing a very good job of discrediting your own position. If you want rational discourse then ranting, incoherence, being factually wrong and conspiracy theories are not the way to go.

Robint

MikeJXE said:

Ofgem info

What you can expect from your supplier:

 Information on how your direct debit is calculated

Your supplier should clearly explain this. All suppliers must take all reasonable steps to ensure that your direct debit payments are based on the best available information, for example, on how much energy you have used. If you are an existing customer, your payments will be based on energy use over the previous year with adjustments if there have been any price changes. If you are a new customer, the payments will be based on a number of factors including previous meter readings and the number of rooms and/or the number of people living in the property.

Information on why your direct debit needs changing and by how much

If your payments need to change, your supplier must explain why. If they need to be increased you will also be notified at least 10 days in advance. However, if you don’t understand why your payments are increasing don’t be afraid to contact your supplier and ask for an explanation.

You see all Ive ever wanted is a monthly direct debit to pay for what I have used - Why is that unreasonable - it used to be available

See the dirty trick here  - the implication is that the Supplier will unilaterally increase and take its own assessment of your monthly payment.  You have lost control.  Dont go there. Dont give them that power. Read other peoples horror stories of how this power has been abused.

Thats what this is all about

GingerTim

Robint said:

MikeJXE said:

Ofgem info

What you can expect from your supplier:

 Information on how your direct debit is calculated

Your supplier should clearly explain this. All suppliers must take all reasonable steps to ensure that your direct debit payments are based on the best available information, for example, on how much energy you have used. If you are an existing customer, your payments will be based on energy use over the previous year with adjustments if there have been any price changes. If you are a new customer, the payments will be based on a number of factors including previous meter readings and the number of rooms and/or the number of people living in the property.

Information on why your direct debit needs changing and by how much

If your payments need to change, your supplier must explain why. If they need to be increased you will also be notified at least 10 days in advance. However, if you don’t understand why your payments are increasing don’t be afraid to contact your supplier and ask for an explanation.

You see all Ive ever wanted is a monthly direct debit to pay for what I have used - Why is that unreasonable - it used to be available

It is available and has never gone away, barring a supplier or two - that's how I pay EDF, for instance.

Robint

MattMattMattUK said:

Robint said:

As you say Bulb is a political football yet to find its own goal - we shall see how it falls on voters. Will they amortise this cost over 1 year, 10 years?  If you change providers once you have consumed your balance and move to fresh fields  hmm

Watch this space

It will not fall on voters, but on household energy bills,      VOTERS PAY THE BILLS there is come cross over but they are not one and the same. In all liklihood it will  be added to standing charges and current estimates are it will be recovered over three years, but it could be over two or five, we will not know until the minister makes the decision and informs Ofgem. Using up a balance and/ changing supplier will make no difference.

GingerTim said:

You see all Ive ever wanted is a monthly direct debit to pay for what I have used - Why is that unreasonable - it used to be available

It is available and has never gone away, barring a supplier or two - that's how I pay EDF, for instance.

Well thnx for that, Ive been told so many lies by my Supplier and other on line sources. will follow that up

Robint

Holy Guano Batman

EDF

What is Direct Debit with exact monthly payments?

This is one of the ways to pay for your energy. You might also know this payment option as 'Direct Debit whole amount monthly'.

What is Direct Debit with exact payments and how does it work?

1. You choose to pay by Direct Debit with exact payments and pick an energy plan (tariff).
2. If you give us your meter readings regularly, you'll get a bill each month. The bill will show exactly how much you need to pay for the energy you've used. As you pay by Direct Debit, it will be paid automatically.
3. If you don't give us your meter readings when we ask for them, you'll pay the regular payment amount instead.

This is a well kept secret

AFAIK EDF use Kaluza Billing as well as YKW

I will check this with them directly tomorrow

Chrysalis

Oh boy big can of worms opened.

Interesting to learn that supposedly (not seen an article to confirm it) Octopus were told off for setting DD's too low, yet in my case if  accepted their proposed DD back in spring I would probably be about 3k in credit right now in the middle of winter.

Ofgem itself seems completely disconnected from consumer needs, yes the people who are useless at managing money might end up with debts on a proper payment system, but at the same time its not taken into account consumers might go into debt elsewhere (robbing peter to pay paul) to make sure they can pay their inflated direct debits.

Its clear the current system is broken, sadly there is people even resisting that statement, and as long as they resist then there will be no changes to fix it.

I think the current method of billing based on a estimated annual cost could continue with the following amendments.  Note some of these are also to encourage people to move to better billing methods.

1 - Consumer education on how energy billing works, requirement to acknowledge read the documents to be accepted for fixed DD billing (many wont but better than what we got now).
2 - Good credit history to be accepted for fixed DD billing.
3 - When in a debit balance on fixed DD for more than 2 billing cycles in a row a small surcharge is added to account for the costs of chasing money from consumers. Vulnerable customers excluded.
4 - Suppliers should recalculate usage every time they get a (not estimated) reading not just once or twice a year, so if someone's usage sharply drops, then their monthly DD is recalculated there and then.  Likewise if it increases, it would still be spread over the year, but would react quickly to usage adjustments.  This already been proposed by a cabinet member so could happen.
5 - 4 Weeks notice required for upward DD adjustments.
6 - Adjust the algorithms to recognise customers who dont have insane winter usage, if the most recent winter has usage similar to summer, then the next 12 months should assume the next winter will be the same for that customer.  This should at least be partially remedied by #4.

I welcome Sunak's plans to extend maths education personally and I hope it will include finance management.

Ofgem itself has issues of course, its very heavily focused on keeping a number of suppliers in the market under the ideology competition fixes everything, this can of course lead to a race to the bottom with companies taking shortcuts such as using credit balances for day to day expenditure.  But a bigger problem with this its becoming more and more evident this ideology to keep competitors afloat is affecting their decision making and it effectively becoming anti consumer.

This will probably be my only post in this thread (wont bookmark it) as I expect a lot of people who feel the industry cant do anything wrong will strongly disagree with my points.

Mstty

If this is going to go down the conspiracy wormhole then it really needs nipping in the bud but I will add my 42p

Ofgem are not fit for purpose that is clear. 

I suspect we will lose a couple more small suppliers so SC will go up not down.

I believe the price we pay in April 2023 is likely to be the price we pay come 1st April 2024.(keeping an eye on Cornwall insights) That could well be the new norm and we are being conditioned to that so government intervention can cease then. Which I believe is right that cannot continue.

Energy companies (like so many other sectors such as doctors surgeries) hid behind covid and have not offered consistent customer service since. Did you know up to 20% of the price of your energy is for IT systems/customer service, the cost of looking after the customer. This is the part failing most imo for 20% cut.

Due to the rise in energy prices energy suppliers even with their low 2% profit are making more money with the increased prices and I suggest they are also skimming the customer service portion of the price of energy as well to make back losses in the past year(s)

All of that said I have had a couple of issues with Eon Next, but nothing insurmountable after taking control of knowing what we use and when.and presenting this information to them.Something I suggest a lot of first time posters here go away and do.