Prepayment meters to be charged at same rate as DD

The_Green_Hornet

MattMattMattUK said:

Alnat1 said:

Sounds unfair that those who choose to pay on receipt of bill will be the only ones paying more.

Is it time to change the system so everyone is charged the same rates no matter how they choose to pay?

Personally I think not, people should be charged according to the cost of their chosen payment method, it should not be cross subsidised.

Everything else is cross subsidised on our energy bills so it was only a matter a time before payment methods were.

km1500

1. pay on receipt - that is the normal tarrif

2. pay by monthly DD - normal tarrif is discounted by a few percent as an incentive

3. prepay - plan is to give the same discount as DD, funded by taxpayer.

bristolleedsfan

km1500 said:

3. prepay - plan is to give the same discount as DD, funded by taxpayer.

Taken from Sky News  "It will be managed through changes to the government's energy price guarantee and, after this ends in April 2024, energy regulator Ofgem will be asked for ways the change can be made permanent"

Spoonie_Turtle

Gas is more expensive on pre-pay, bit late for this winter but good news for next.

I doubt this applies to people feeding coin meters or random landlord-installed meters collected by 3rd party companies though.

bristolleedsfan

Sea_Shell said:

Are there 3 categories of rates at the moment...?

Prepay meters
Pay on receipt of bill

Pay by DD (fixed or variable)


Is the plan to level out all 3 methods?  

4 categories

Prepayment key and card
Smart Pre-Pay ( EDF offer lower night rates than DD for Eco7 )
Pay on receipt of bill

Pay by DD (fixed or variable)

MWT

... although the Ofgem cap on standing charges doesn't separate the first two of those...

diystarter7

superkoopauk said:

I don't really understand this.  There are additional costs to serve for PPM meters so how is paying for those clearly unfair?  As others point out the same principles apply to non DD payers so why aren't they being catered for?

There might be a case for smart PPM meters to have a different cap level  to traditional PPM meters as the infrastructure costs are lower (but not zero) on PPM smart

How could this change be achieved in the current Ofgem cap model?  Assumedly the PPM costs currently assigned to those meters will be proportionally spread over the other payment types.  Therefore DD customers will pay more and overall people will be worse off.  It just doesn't seem right to me 

Also as this will be effective from July at a lower price cap level so I don't see why people are saying PPM electricity prices will go up.  What am I missing?   

Hi

I thought I was the only one confused by this,
No, it is not right, many will agree.

Thnaks

PennineAcute

My prices will be going up then.

Marvel1

matelodave said:

Can people not actually understand the principle, It's not that Prepay or Pay on Receipt pay more ,its that those on a DD get a discount.

People who pay on recieipt of their bill effectively get free credit and anyone who pays by other methods get a discount. 

Those who prepay, get less of a discount as there are additional charges to enable prepay to work (including I guess a commission to those outlets that provide meter top-up facilities) Perhaps the answer there is to crank up the standing charge for pre-pay meters to offset the additonal collection charges and then give them the same discount as DD customers on their consumption.

However those who pay by DD quite often pay well in advance and as its by far the cheapest way for the supplier to collect their payments, its those on DD who get the better discount.

TBH if theres no discount advantage in paying by DD then I can't cant see the point as again we'll all be subsidising those who choose not to

Those not paying by DD are subsidising those who were in credit when an energy company collapses.

victor2

Marvel1 said:

matelodave said:

Can people not actually understand the principle, It's not that Prepay or Pay on Receipt pay more ,its that those on a DD get a discount.

People who pay on recieipt of their bill effectively get free credit and anyone who pays by other methods get a discount. 

Those who prepay, get less of a discount as there are additional charges to enable prepay to work (including I guess a commission to those outlets that provide meter top-up facilities) Perhaps the answer there is to crank up the standing charge for pre-pay meters to offset the additonal collection charges and then give them the same discount as DD customers on their consumption.

However those who pay by DD quite often pay well in advance and as its by far the cheapest way for the supplier to collect their payments, its those on DD who get the better discount.

TBH if theres no discount advantage in paying by DD then I can't cant see the point as again we'll all be subsidising those who choose not to

Those not paying by DD are subsidising those who were in credit when an energy company collapses.

I thought all energy users are paying for the SoLR process through the standing charge?