New National Analysis on E7 Price Increase - Ave 7.6%

pensionpawn

I agree entirely with Scot_39. Here is what I posted in a related thread...

I agree that I'm not the prime target customer of the E7 tariff, at <30% night time use. However there's no getting away from the fact that pushing the break even E7 utilisation threshold up from ~20% -> ~30% -> 40% will shift more demand into the daytime. I'll add some context. I have solar panels however they're no use at night. So if i'm going to run the dishwasher, washing machine / dryer etc when on E7 I used to make a judgement call based on the weather forecast for the next day. If it's forecast to be a sunny day I'll run the high usage appliances in sequence during the day, running the risk that if clouds appear I'll end up part paying day rate. If the forecast is no sun they run at night with the knowledge that I'll be paying a certain cost, which will be lower than day rate though higher than free (e.g. the sun is shining though it wasn't forecasted to). So now, on single rate, which is cheaper than day rate, I just put everything on during the day and if the sun reduces my electrical import, that's a bonus. I'm sure that I'm not the only person in the UK who'll be doing that now.

The_Green_Hornet

mmmmikey said:

dunstonh said:

Rubbish reporting by the BBC.  And no referencing to the fact you can shop around and pick suppliers as pricing is different across the suppliers with some targetting higher off peak ratios than others.

My E7 costs are going down thanks to EDF going to 7p off peak and I have over 70% ratio to off peak.  If I was just 20% then it would be going up and I would be better with another supplier but it would still not be right to go single rate.

Yes indeed - shockingly bad reporting and a misleading and unhelpful article. Makes you wonder how good their reporting is on other issues. There was a time when the BBC was a reliable source of news but sadly those days seem to have gone.

Plus why is the occupation of the lady referred to in the article of any relevance?

Scot_39

The_Green_Hornet said:

mmmmikey said:

dunstonh said:

Rubbish reporting by the BBC.  And no referencing to the fact you can shop around and pick suppliers as pricing is different across the suppliers with some targetting higher off peak ratios than others.

My E7 costs are going down thanks to EDF going to 7p off peak and I have over 70% ratio to off peak.  If I was just 20% then it would be going up and I would be better with another supplier but it would still not be right to go single rate.

Yes indeed - shockingly bad reporting and a misleading and unhelpful article. Makes you wonder how good their reporting is on other issues. There was a time when the BBC was a reliable source of news but sadly those days seem to have gone.

Plus why is the occupation of the lady referred to in the article of any relevance?

To provoke sympathy.  Because she was a nurse.

And everyone in the media loves to peddle the narritive of the good old  "poor nhs employee" 

pochase

pensionpawn said:

I agree entirely with Scot_39. Here is what I posted in a related thread...

I agree that I'm not the prime target customer of the E7 tariff, at <30% night time use. However there's no getting away from the fact that pushing the break even E7 utilisation threshold up from ~20% -> ~30% -> 40% will shift more demand into the daytime. I'll add some context. I have solar panels however they're no use at night. So if i'm going to run the dishwasher, washing machine / dryer etc when on E7 I used to make a judgement call based on the weather forecast for the next day. If it's forecast to be a sunny day I'll run the high usage appliances in sequence during the day, running the risk that if clouds appear I'll end up part paying day rate. If the forecast is no sun they run at night with the knowledge that I'll be paying a certain cost, which will be lower than day rate though higher than free (e.g. the sun is shining though it wasn't forecasted to). So now, on single rate, which is cheaper than day rate, I just put everything on during the day and if the sun reduces my electrical import, that's a bonus. I'm sure that I'm not the only person in the UK who'll be doing that now.

The ratio Ofgem bases the E7 tariffs on is a 42% to 58% split, if you have this split it needs to be the same cost for the 4200KWh as it would be on single rate.

So officially you always needed to use more than 42% at night to be guaranteed to save money on E7. 

Everybody below the 42% was not in the target group, they benefitted that suppliers created tariffs where you could already save money at 20%, there was even a Octopus tariff last year where 10% night use was the break even.

dunstonh

You are lucky.
But the report and the 7.6% is an average. 

It's not luck.  It's about being on the right tariff to suit my use.   Averages are pointless for most people and the article uses averages to paint a picture that is not relevant to most people.    

It was akin to buying apples and being angry they dont taste like bananas.     There is nothing wrong with the apples. They just were not right for you.   The article just focused on the negative and showed what one woman did and it probably wasnt the right option for her.

EssexHebridean

pochase said:

The problem was that the E7 rates for October were cheaper than the EPG when they were calculated on the 42/58 split in many cases.

Now for January they have been increased to the EPG single rate level, so the correct statement would be that E7 users got a price below the EPG for the last three month.

Shhhh… 😆

Joking aside though, a very quick and dirty calculation estimates my EPG equivalent rate at somewhere in the region of 31pkWh prior to January 1st. Now it comes out to 35p - spot on, pretty much for my region as far as I know. I was very grateful that it was lower before, but I wasn’t surprised when it was announced that the discrepancy was being corrected to be honest. It was right that it was - someone on standard EPG rates shouldn’t be effectively subsidising my use, should they! In real terms, because of my usage profile, my “real” per kWh rate still comes in well below EPG. That’s because of the way I use E7 though - there’s no luck involved. 

Pensionpawn - I don’t understand why you still wouldn’t inform your appliance use choices based on the forecast as you always did though? Surely to review the forecast and make the decision whether you could gamble on sun, or whether to simply run the appliances regardless would still save you energy and so money down the line? 

pensionpawn

dunstonh said:

You are lucky.
But the report and the 7.6% is an average. 

It's not luck.  It's about being on the right tariff to suit my use.   Averages are pointless for most people and the article uses averages to paint a picture that is not relevant to most people.    

It was akin to buying apples and being angry they dont taste like bananas.     There is nothing wrong with the apples. They just were not right for you.   The article just focused on the negative and showed what one woman did and it probably wasnt the right option for her.

I think you might be missing the point. Historically the ratio was more like 70:30, or even 80:20 decades ago. The point being that historically these "currently frustrated" E7 customers were on a suitable tariff for their usage profile in the past. However over time the advantage of E7 to these customers has been steadily eroded, and has just recently vanished. You're not wrong that the E7 tariff is inappropriate for them now, that isn't being contended. So what is the impact of the changing E7 ratio, well it's migration to the single tariff and an increasing daytime demand on the grid / energy generators during an energy crisis. Surely not what Ofgen should be encouraging?

dunstonh

I think you might be missing the point. Historically the ratio was more like 70:30, or even 80:20 decades ago. The point being that historically these "currently frustrated" E7 customers were on a suitable tariff for their usage profile in the past. 

In 2022, you could get as low as 10% night use to be better on E7 with a certain supplier but 20% upwards was more typical.

Some suppliers have certainly pushed their pricing to favour those with much higher night ratios. However, that suggests the market is more efficient than single price as it still provides choice.

. You're not wrong that the E7 tariff is inappropriate for them now, that isn't being contended. So what is the impact of the changing E7 ratio, well it's migration to the single tariff and an increasing daytime demand on the grid / energy generators during an energy crisis. Surely not what Ofgen should be encouraging?

E7 may still be appropriate.  Just not the E7 supplier they are using.  If one has a business model that wants to price for a high ratio of night use and you are a low night user then single rate may be the best option but so could be moving to a supplier that prices on a lower nigh rate ratio.

Changing from multi-rate to single rate wont change how these people use their electricity.   It will just change the price they pay.

Scot_39

dunstonh said:

You are lucky.
But the report and the 7.6% is an average. 

It's not luck.  It's about being on the right tariff to suit my use.   Averages are pointless for most people and the article uses averages to paint a picture that is not relevant to most people.    

It was akin to buying apples and being angry they dont taste like bananas.     There is nothing wrong with the apples. They just were not right for you.   The article just focused on the negative and showed what one woman did and it probably wasnt the right option 

Because you are in the right region.  (EDF iirc E7 current prices are over double off peak in some regions than others, other suppliers may easily be double if not treble edfs in their cheaper regions) 

Able to arrange a swap or already with that supplier on the right payment terms.

And have the ability and equipment to use the correct day night balance to benefit from it without needing to invest potentially  £1000s.

That is patently not true for everyone.


Averages by definition are limitted in their meaningfulness, but remain useful as an indicator. They don't pretend to represent a single person or single sample.

Just because your saving does not match, doesn't make it either invalid or meaningless.

In fact potentially cases like yours even reduces the average.  As you are now saving on your bills.

Just like figures posted for E7 increases with other suppliers - above that average, don't make it invalid.

pensionpawn

dunstonh said:

I think you might be missing the point. Historically the ratio was more like 70:30, or even 80:20 decades ago. The point being that historically these "currently frustrated" E7 customers were on a suitable tariff for their usage profile in the past. 

In 2022, you could get as low as 10% night use to be better on E7 with a certain supplier but 20% upwards was more typical.

Some suppliers have certainly pushed their pricing to favour those with much higher night ratios. However, that suggests the market is more efficient than single price as it still provides choice.

. You're not wrong that the E7 tariff is inappropriate for them now, that isn't being contended. So what is the impact of the changing E7 ratio, well it's migration to the single tariff and an increasing daytime demand on the grid / energy generators during an energy crisis. Surely not what Ofgen should be encouraging?

E7 may still be appropriate.  Just not the E7 supplier they are using.  If one has a business model that wants to price for a high ratio of night use and you are a low night user then single rate may be the best option but so could be moving to a supplier that prices on a lower nigh rate ratio.

Changing from multi-rate to single rate wont change how these people use their electricity.   It will just change the price they pay.

I've checked a few energy firms for Wiltshire and I can't find one with a 70:30 split, or better. If anyone can point me in the right direction then please do let me know.
Changing from multi to single rate can change how people use their electricity based on their circumstances. I now run my appliances when it is convenient to me, which is now during the day.