Stick with EDF fix or move to standard rate for energy?

kyorin

As of July, my EDF deal will revert to the Fix I took out just over a year ago. If I stay with the fix, it looks like it will cost around £365 more than if I switch to EDF's standard tarrif. Seems like a no-brainer to switch to the standard rate at first, but prices may go silly again as we get nearer to winter, and when perhaps resources become constrained again...

Basically, what are people in this situation doing? Any advice?

dillydilly1

yep just got similar email - stay on fix @ 13p/unit until July24 or take the £150 hit and drop to the variable 7.4p/unit
current expectations is that the cap could drop further in Oct then hold steady over the winter, so on my annual use of 10k units that's a difference of £600/yr - looks an easy one to take the penalty hit, unless anyone objects ?

brewerdave

My fix til end June 2024 will cost me ~ £500pa more for electricity alone - so I'm jumping today to the SVT -If they charge the exit fee so be it. Only took the fix last year because of the market predictions which were pretty dire - but then Liz Truss threw the taxpayers under the bus , along with home owners!!
What's amusing is that their estimate for my monthly payment on SVT will be £40 less than now - but there is an urgent message to ask me to review my DD in case I'm not paying enough !!

sav0

brewerdave said:

My fix til end June 2024 will cost me ~ £500pa more for electricity alone - so I'm jumping today to the SVT -If they charge the exit fee so be it. Only took the fix last year because of the market predictions which were pretty dire - but then Liz Truss threw the taxpayers under the bus , along with home owners!!
What's amusing is that their estimate for my monthly payment on SVT will be £40 less than now - but there is an urgent message to ask me to review my DD in case I'm not paying enough !!

I also took this deal , at the time they were giving £100 for signing up I have just been given £50 because they can't get my smart meter to send readings so that £150 i will use to switch to octopus

brewerdave

brewerdave said:

My fix til end June 2024 will cost me ~ £500pa more for electricity alone - so I'm jumping today to the SVT -If they charge the exit fee so be it. Only took the fix last year because of the market predictions which were pretty dire - but then Liz Truss threw the taxpayers under the bus , along with home owners!!
What's amusing is that their estimate for my monthly payment on SVT will be £40 less than now - but there is an urgent message to ask me to review my DD in case I'm not paying enough !!

For completeness - my switch to SVT takes place wef tomorrow - but the balance has already been updated with a debit of £100, and I didn't get a £150 bribe to fix a year ago ,so good luck to those who think that EDF customer service have guaranteed no exit fees !!

dealyboy

@brewerdave said:

brewerdave said:

My fix til end June 2024 will cost me ~ £500pa more for electricity alone - so I'm jumping today to the SVT -If they charge the exit fee so be it. Only took the fix last year because of the market predictions which were pretty dire - but then Liz Truss threw the taxpayers under the bus , along with home owners!!
What's amusing is that their estimate for my monthly payment on SVT will be £40 less than now - but there is an urgent message to ask me to review my DD in case I'm not paying enough !!

For completeness - my switch to SVT takes place wef tomorrow - but the balance has already been updated with a debit of £100, and I didn't get a £150 bribe to fix a year ago ,so good luck to those who think that EDF customer service have guaranteed no exit fees !!

Is the new EDF fix 'Essentials Exclusive' available/suitable for you? (can be found under 'Change tariff').

nic2075

I’m in a similar position and I’m not sure what to do. My fixed rate ends Aug 31st. I’ve luckily been in it since 2021 so avoided all the increases. I pay £91 a month for a 3 bed house. My offers are a fixed rate ending July 2024 that’s £205pm or standard variable at £202 pm. I’ve been on fixed rates for years but it’s looking cheaper to switch to SVT once the Fixed rate ends. I’m worried it gets to Jan and starts increasing again. 

michaels

dillydilly1 said:

yep just got similar email - stay on fix @ 13p/unit until July24 or take the £150 hit and drop to the variable 7.4p/unit
current expectations is that the cap could drop further in Oct then hold steady over the winter, so on my annual use of 10k units that's a difference of £600/yr - looks an easy one to take the penalty hit, unless anyone objects ?

Thing is they are not expectations, they are what energy for delivery in the winter is currently trading at.  The energy companies are not allowed to buy the energy for next winter now, it has to be purchased a rolling 4 months before it is supplied at which time it may be considerably higher (or I guess lower) than the current price for that period that the 'forecasts' are based on.

If anyone knew what prices will actually be when the price cap is hedged they would not be making forecasts they would be lying on a beach in the Maldives - their own beach on their own Island.

QrizB

michaels said:

Thing is they are not expectations, they are what energy for delivery in the winter is currently trading at.  The energy companies are not allowed to buy the energy for next winter now, it has to be purchased a rolling 4 months before it is supplied at which time it may be considerably higher (or I guess lower) than the current price for that period that the 'forecasts' are based on.

I think you've got that wrong (although if you profess particular inside knowledge, I could be persuaded to change my mind on that).

The energy companies are allowed to buy energy as far ahead as they wish, and at whatever price they care to negotiate.

The Ofgem cap, however, is calculated on the basis of forward energy prices during a stated observation period.

The way this is carried out is laid down in tedious detail on a series of Ofgem publications. Here is a link to one of them.

https://www.ofgem.gov.uk/publications/price-cap-final-guidance-treatment-price-indexation-future-default-tariff-cap-periods

CSI_Yorkshire

michaels said:

dillydilly1 said:

yep just got similar email - stay on fix @ 13p/unit until July24 or take the £150 hit and drop to the variable 7.4p/unit
current expectations is that the cap could drop further in Oct then hold steady over the winter, so on my annual use of 10k units that's a difference of £600/yr - looks an easy one to take the penalty hit, unless anyone objects ?

  The energy companies are not allowed to buy the energy for next winter now, it has to be purchased a rolling 4 months before it is supplied 

That's nonsense, and directly contradicts your posts on another thread where you were claiming that suppliers buy all energy for fixes up front on the day you sign.

Neither are true.

michaels

QrizB said:

michaels said:

Thing is they are not expectations, they are what energy for delivery in the winter is currently trading at.  The energy companies are not allowed to buy the energy for next winter now, it has to be purchased a rolling 4 months before it is supplied at which time it may be considerably higher (or I guess lower) than the current price for that period that the 'forecasts' are based on.

I think you've got that wrong (although if you profess particular inside knowledge, I could be persuaded to change my mind on that).

The energy companies are allowed to buy energy as far ahead as they wish, and at whatever price they care to negotiate.

The Ofgem cap, however, is calculated on the basis of forward energy prices during a stated observation period.

The way this is carried out is laid down in tedious detail on a series of Ofgem publications. Here is a link to one of them.

https://www.ofgem.gov.uk/publications/price-cap-final-guidance-treatment-price-indexation-future-default-tariff-cap-periods

They can do what they want but have a choice of either speculating on prices or locking in the small regulated profit by buying to the cap price setting rules.  Firms who did otherwise (including those who didn't hedge fixes) went spectacularly broke when prices surged.  I suspect any firms who were not effectively hedging their fixes and the cap (which is effectively a 3 month rolling fix) would be examined very closely by the regulator to confirm they had sufficient capital reserves to cover any losses if the markets turned against them.

Are the supply companies just that or are they trading companies who try to make money via speculation - I would be very surprised if it were the latter.

IEA appear to agree with me re risk of price spikes this winter.  Note the prices could spike down as well as up which would wipe out any energy supplier who decided to hedge the cap right now.

Energy boss says prices might rise this winter - BBC News