Is 8.1 Billion too much for energy firms to hold of customer money?

badmemory

The chances of those standing charges coming down are slim to none.  They have a lot of dividends & CEOs to pay out.  It isn't like they are actually going to do anything to improve the network.

[Deleted User]

badmemory said:

The chances of those standing charges coming down are slim to none.  They have a lot of dividends & CEOs to pay out.  It isn't like they are actually going to do anything to improve the network.

Why do posts end up with digs at shareholders et al? The truth is that standing charges are unlikely to fall as we have to pay for significant improvements to the existing grid infrastructure to keep power flowing and to meet Nett Zero. Also, unless I have missed it, we have yet to hear whether any costs from Bulb’s special administration will be added to consumer bills.

stu12345_2

MasterCard makes 98% gross margin.the best in the world.around 50% net.apple makes about a third of that. just pointing out the efficiency of having an asset light business model.
bill ackman said MasterCard is the best money printing type of business in the world.

Jonboy_1984

Personally I am incredibly angry that I am/have been paying a much increased standing charge to cover the credit balances of those who chose to chase the lowest cost financially unstable operators.

This game of privatise the profits, nationalise the loses is a blight on the uk economy.

Frankly credit balance should either be ring-fenced, or customers should lose them if their choice of supplier goes bust, and it should be clear when you sign up to a supplier which game you are agreeing to.

ArbitraryRandom

I'd prefer a requirement to hedge over a requirement to ring fence - and if they go bust those 'futures' to be transferred with the customers to the SOLR. 

MattMattMattUK

stu12345_2 said:

MasterCard makes 98% gross margin.the best in the world.around 50% net.apple makes about a third of that. just pointing out the efficiency of having an asset light business model.
bill ackman said MasterCard is the best money printing type of business in the world.

Gross margin is irrelevant, net is what matters. 

badmemory

Jonboy_1984 said:

Frankly credit balance should either be ring-fenced, or customers should lose them if their choice of supplier goes bust, and it should be clear when you sign up to a supplier which game you are agreeing to.

Pity ofgem didn't do their job instead of protecting the suppliers profits.  That is what they were there for after all.  If they allowed them to ply for trade they should have been making sure that that choice was actually viable instead of keep telling us to shop around.

MattMattMattUK

badmemory said:

Jonboy_1984 said:

Frankly credit balance should either be ring-fenced, or customers should lose them if their choice of supplier goes bust, and it should be clear when you sign up to a supplier which game you are agreeing to.

Pity ofgem didn't do their job instead of protecting the suppliers profits.  That is what they were there for after all.  If they allowed them to ply for trade they should have been making sure that that choice was actually viable instead of keep telling us to shop around.

Ofgem did not protect suppliers profits, they forced them to sell below cost for nearly a year, losing billions. 

dealyboy

At the end of the day it's about customer choice (or should be).

If the demand is there for fixed direct debits to spread the estimated cost and this is an informed and free choice then fair enough £8,100,000,000 of customer money is the figure. However if the 'regular payment' is the preferred or default 'budget' option and it is difficult to pay by usage, as is the norm in many other areas, then intervention is needed.

I'm afraid energy suppliers as a whole are are not trusted and so need to show their fair billing and payment credentials.

stu12345_2

MattMattMattUK said:

stu12345_2 said:

MasterCard makes 98% gross margin.the best in the world.around 50% net.apple makes about a third of that. just pointing out the efficiency of having an asset light business model.
bill ackman said MasterCard is the best money printing type of business in the world.

Gross margin is irrelevant, net is what matters. 

net margin is close to 50% for MasterCard.but energy companies have small net margins due to being heavy capital intensive industry.
unlike MasterCard which prints profits easily