Electricity companies overcharging?

MattMattMattUK

Tiger_greeneyes said:

This is the news article I was sent, the first 30 seconds is about reading your meters yesterday, after that is what has concerned me

Energy bills segment

https://www.gbnews.com/money/energy-bills-meter-reading-price-cap

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[Quoted post removed by Forum Team]

The source relates to the accuracy of the information, as well as how the information is presented. Present a few facts, but throw in a lot of opinion and some somewhat less accurate information, get people stirred up, keep viewers coming back, that is a business model, but it does not always get the information across in a factually accurate way. Expert is subjective, especially when they have a specific presentation style and media presence. 

Tiger_greeneyes said:

Surely the energy companies only pay for the gas that's used?

They pay for the gas the use, but your energy supplier generates zero energy itself, it buys electricity generated from gas, which it buys on the UK electricity wholesale market at the rate set by the market, based on a government mandated formula. The cost of electricity is set based on the most expensive generation in that window. That is the simplified version, the non-simplified version is something you can read up on if you want, expect to spend many hours doing that if you want to fully understand it.

Tiger_greeneyes said:
What about companies who say they use 100% renewable energy? Surely that would mean they don't use any gas at all?

Only if you believe the marketing, energy goes into the grid, energy comes out of the grid, the way those quotes are made are in my opinion (and in the opinion of many others, including a lot of "experts") is untruthful. 

Tiger_greeneyes said:
If that's the case, why should people be paying the gas price when the energy wasn't produced by gas?

Even if it was the case, and it is not, then that is irrelevant, the cost is still set by the wholesale market mechanism. 

Tiger_greeneyes

I'm not interested in anyone's opinions on news channels but I very much appreciate the rest of your comments, it's explained it well for me. Thank you.

Gerry1

"The energy price cap is the minimum amount suppliers can charge the typical household per unit of gas and electricity if they pay by direct debit."

Oh good, I've learned something useful today thanks to GB News.  Thank goodness Ofgem is keeping prices high and preventing those pesky suppliers selling energy too cheaply !

Tiger_greeneyes

Gerry1 said:

"The energy price cap is the minimum amount suppliers can charge the typical household per unit of gas and electricity if they pay by direct debit."

Oh good, I've learned something useful today thanks to GB News.  Thank goodness Ofcom is keeping prices high and preventing those pesky suppliers selling energy too cheaply !

There's always a way to rinse us for another penny, Gerry!

GingerTim

Gerry1 said:

"The energy price cap is the minimum amount suppliers can charge the typical household per unit of gas and electricity if they pay by direct debit."

Oh good, I've learned something useful today thanks to GB News.  Thank goodness Ofgem is keeping prices high and preventing those pesky suppliers selling energy too cheaply !

There's that keen attention to detail and commitment to accuracy we expect from GB News!

Ectophile

Imagine there are two potato farmers, Old McDonald and Farmer Giles.

Old McDonald's farm is in a lush fertile valley.  It's always cool, and Old McDonald never has to buy in fertiliser.  He can grow potatoes for about £1 per kg.

Farmer Giles' land is on an open sandy plain.  In the winter, the rainwashes the fertility out of the soil, and in summer the ground bakes dry.

One year, it's been a particularly wet winter, followed by a dry spring.  Farmer Giles has had to buy in loads of fertiliser then loads of irrigation water just to get the potatoes to grow.  By harvest time, it's costing him £1.50 per kg.

Farmer Giles is the first to arrive at the market with his truckload of potatoes.  He starts selling them at £1.50 per kg. The customers moan at how expensive potatoes are this year, but they have no choice but to pay £1.50.

Then Old McDonald turns up with his truck of potatoes, and sees Farmer Giles selling them for £1.50.  What price do you think he's going to put on his ones?

The wind farm operators aren't stupid.  If it's not windy enough, then the gas turbines need to be turned on.  And these days, gas power is the most expensive.  So how much do you think the wind turbine operators are going to want per kWh?  They will set their prices a fraction below the price of gas, so they win the auction and get picked first.  But they aren't going to set the price any lower than that.

Tiger_greeneyes

Ectophile said:

Imagine there are two potato farmers, Old McDonald and Farmer Giles.

Old McDonald's farm is in a lush fertile valley.  It's always cool, and Old McDonald never has to buy in fertiliser.  He can grow potatoes for about £1 per kg.

Farmer Giles' land is on an open sandy plain.  In the winter, the rainwashes the fertility out of the soil, and in summer the ground bakes dry.

One year, it's been a particularly wet winter, followed by a dry spring.  Farmer Giles has had to buy in loads of fertiliser then loads of irrigation water just to get the potatoes to grow.  By harvest time, it's costing him £1.50 per kg.

Farmer Giles is the first to arrive at the market with his truckload of potatoes.  He starts selling them at £1.50 per kg. The customers moan at how expensive potatoes are this year, but they have no choice but to pay £1.50.

Then Old McDonald turns up with his truck of potatoes, and sees Farmer Giles selling them for £1.50.  What price do you think he's going to put on his ones?

The wind farm operators aren't stupid.  If it's not windy enough, then the gas turbines need to be turned on.  And these days, gas power is the most expensive.  So how much do you think the wind turbine operators are going to want per kWh?  They will set their prices a fraction below the price of gas, so they win the auction and get picked first.  But they aren't going to set the price any lower than that.

Makes a lot of sense, that! Thank you!