Ofgem to increase Winter Price Cap to cover cost of people not paying their bills.

SAC2334

Bigphil1474 said:

Trouble is, it also hits the can't pays hard as well. I don't see any problem with pre-payment meters, generally speaking, for ordinary people (different for people with specific needs/issues), but IMO they should benefit from subsidised energy rates based on their income. After all, they are paying up front, whereas those of us on credit meters get to pay for our energy after we have used it. This would benefit the can't pay as they get cheaper energy, and the won't pays and thieves can't get round it. By making PP meters more expensive, those that are struggling will struggle more or have to sit in the cold - not good for a civilised society.

Fully agree that prepayment meters should not be any more expensive than direct debits but only with smart prepayment meters .
 Old style card and key meters are much more expensive to run. Customers routinely damage them , fiddle them and theres a middle man to pay at the Paypoint. 

Back in before 2014 they were much more expensive and their kwh rates were substantially higher to reflect their increased running costs until the MP s found out about it and they were brought into line with pay on the bill rates ( with a subsidy )
Different matter now with smart prepay.They are not fiddled , no middle man , no billing costs to speak of, probably lower than a direct debit , and their running costs will be the lowest so much that smart prepayment users should be the lowest rates available  
I know in Northern Ireland they are run differently and smart prepays there did nt have an internet connection and they were reported as having cheapest rates . 

Qyburn

There's a small faction promoting the idea that removing the supplier's meter and fitting a replacement, in some way gives you free energy. As usual with these "something for nothing" theories, it's being promoted by people who make money carrying out that work. Octopus has started disconnecting and capping off supplies for some of these people but I do think that a few actual criminal prosecutions would do wonders.

Scot_39

Qyburn said:

Scot_39 said:
Without the EBSS, as a low user, current cap forecasts reducing means at best my bills will be roughly same as last winter - last time I did maths - CI forecasts were c£50-100 higher and I was paying more.

And like food inflation, energy inflation hits the poorest hardest.

Are you saying you're a low energy user? The figure you listed, if those are your actual monthly bills, look high.

The £ figures above are the tdcv Ofgem energy caps, not my usage.

wrf12345

Bad debt needs to come out of the energy companies profits and then out of their salaries (including Ofgem's as they are plainly incompetent) not out of the pockets of "good" customers. Prepayment meters fitted where there is no debt need to be run at a discount as there is no bad debt risk for the energy companies compared to other methods - preferably by removing standing charges.

MattMattMattUK

Qyburn said:

There's a small faction promoting the idea that removing the supplier's meter and fitting a replacement, in some way gives you free energy. As usual with these "something for nothing" theories, it's being promoted by people who make money carrying out that work. Octopus has started disconnecting and capping off supplies for some of these people but I do think that a few actual criminal prosecutions would do wonders.

They are often connected to the "freeman of the land" nutjobs. I agree, prosecutions are the way forward with those idiots. 

Qyburn

MattMattMattUK said:

They are often connected to the "freeman of the land" nutjobs. I agree, prosecutions are the way forward with those idiots. 

Nothing else seems to get through to them. The response to their members being disconnected seems to be just to bang on about being vulnerable, and ramble about suing Octopus.

TheElectricCow

wrf12345 said:

Bad debt needs to come out of the energy companies profits and then out of their salaries (including Ofgem's as they are plainly incompetent) not out of the pockets of "good" customers. Prepayment meters fitted where there is no debt need to be run at a discount as there is no bad debt risk for the energy companies compared to other methods - preferably by removing standing charges.

And what happens if we reach a point where those losses from bad debts eliminate all of the energy company’s profits and they have to go out of business? Or what if to avoid that happening they decide to double down and go for installing prepayment meters at the first sign of any consumer debt that isn’t immediately paid?

Not to mention making a zero standing charge tariff with the same standard unit costs as everyone else would be a terrible idea. That would mean everyone can avoid the standing charge entirely by simply switching to prepayment (there would be little reason not to) and suddenly there’s no one to pay for the network infrastructure and supply costs of getting energy to your home, other than those in bad debt.

MattMattMattUK

wrf12345 said:

Bad debt needs to come out of the energy companies profits and then out of their salaries (including Ofgem's as they are plainly incompetent) not out of the pockets of "good" customers. 

Why should it come out of their profits when they are prevented from enforcing the debts? I would agree if they were allowed to function like any other industry, cut supply and enforce the debt, but they are not, they must keep supplying pretty much regardless and they are often not allowed to enforce the debt or recover their costs. 

wrf12345 said:

Prepayment meters fitted where there is no debt need to be run at a discount as there is no bad debt risk for the energy companies compared to other methods

There might be no bad debt with pre-payment, but there are higher operating costs, which are reflected in the costs.

wrf12345 said:

preferably by removing standing charges.

No, because that would mean that they are connected to the energy networks for free, so subsequently being subsidised by other customers. 

[Deleted User]

TheElectricCow said:

wrf12345 said:

Bad debt needs to come out of the energy companies profits and then out of their salaries (including Ofgem's as they are plainly incompetent) not out of the pockets of "good" customers. Prepayment meters fitted where there is no debt need to be run at a discount as there is no bad debt risk for the energy companies compared to other methods - preferably by removing standing charges.

And what happens if we reach a point where those losses from bad debts eliminate all of the energy company’s profits and they have to go out of business? Or what if to avoid that happening they decide to double down and go for installing prepayment meters at the first sign of any consumer debt that isn’t immediately paid?

Not to mention making a zero standing charge tariff with the same standard unit costs as everyone else would be a terrible idea. That would mean everyone can avoid the standing charge entirely by simply switching to prepayment (there would be little reason not to) and suddenly there’s no one to pay for the network infrastructure and supply costs of getting energy to your home, other than those in bad debt.

I struggle with this decision. The default position in energy is that when something in the sector goes wrong, the consumer pays. This doesn’t happen with broadband; water; Sky etc.

The truth is that despite warnings from suppliers that bad debt was increasing, the Government got worried that it would be blamed for deaths if they didn’t stop suppliers fitting pre-payment meters. I am not defending the way that it was done by some suppliers but it is hardly fair that, say, a pensioner who has struggled to stay warm last Winter but managed it, will have to pay up to £30 a year extra to cover debts that are not of their making. As a Society, we have to come up with a better way of managing consumer energy debt than by adding it to everybody’s standing charge. Standing charges are fast becoming a Government money tree.

MattMattMattUK

[Deleted User] said:

TheElectricCow said:

wrf12345 said:

Bad debt needs to come out of the energy companies profits and then out of their salaries (including Ofgem's as they are plainly incompetent) not out of the pockets of "good" customers. Prepayment meters fitted where there is no debt need to be run at a discount as there is no bad debt risk for the energy companies compared to other methods - preferably by removing standing charges.

And what happens if we reach a point where those losses from bad debts eliminate all of the energy company’s profits and they have to go out of business? Or what if to avoid that happening they decide to double down and go for installing prepayment meters at the first sign of any consumer debt that isn’t immediately paid?

Not to mention making a zero standing charge tariff with the same standard unit costs as everyone else would be a terrible idea. That would mean everyone can avoid the standing charge entirely by simply switching to prepayment (there would be little reason not to) and suddenly there’s no one to pay for the network infrastructure and supply costs of getting energy to your home, other than those in bad debt.

I struggle with this decision. The default position in energy is that when something in the sector goes wrong, the consumer pays. This doesn’t happen with broadband; water; Sky etc.

Broadband, Sky etc. are allowed to disconnect the customer to stop them accumulating further debts and they are allowed to properly undertake recovery action, energy suppliers are not.