MSE News: More energy deals with NO standing charges finally on the cards

matt_drummer

Philip_P said:

born_again said:

There is no win win situation.
Somewhere along the line we will have to pay for it either directly or indirectly, which given the inefficiencies of any government system will mean everyone will pay even more 🤷‍♀️🤣

Standing charges increased to cover all the failed energy companies bailouts. This should be funded by general taxation so that the Standing charges can revert back to their previous level

Maybe the failed energy company costs should have been borne by those who benefitted from the cheap rates offered by dodgy fly by night energy companies that didn't do their job properly.?

After all, it was only those customers credit balances that were protected and then those customers were protected again by getting their energy subsidised because decent suppliers now had to source energy for an influx of customers they hadn't planned for.

The failed energy companies were not bailed out, they failed! It was only their customers that were bailed out.

Those that stuck with established suppliers have still had to pay for something they got no benefit from.

And now you want tax payers to fund it?

Scot_39

From the last 3 annualised major reviews in price change cap letters referencing significant shifts in SoLR - it hasnt been mentioned at all in last 3 cap summary letters for July 24, Oct24 and Jan 2025.

SoLR contributing £68 to £103 of increased costs

See  Network cost section of

https://www.ofgem.gov.uk/sites/default/files/2022-02/Default tariff cap letter for 1 April 20221643903154554.pdf

SoLR reduced from £61 to £19 in April 2023.

See  Network cost section of

https://www.ofgem.gov.uk/sites/default/files/2023-02/Default Tariff Cap Letter for 1 April 2023.pdf

SoLR reduced by another £17 in Apr 2024

See  Network cost section of

https://www.ofgem.gov.uk/sites/default/files/2024-02/Default Tariff Cap Letter - 1 April 2024 .pdf

So on that basis unless Ive missed interim adjustments - Im not going to trail through every quarters letters ot the detailed spreadheets - feel free if you want to - it's now potentially as low as £2 ex VAT or £1 per fuel - possible zero.

SoLR is vety much yesteryears argument - and has very little to do with today's higher standing charges. 

If interested in the shifts in the standing charges over last couple of years see

https://consult.ofgem.gov.uk/energy-supply/standing-charges-domestic-retail-options/supporting_documents/standing_charges_domestic_retail_options.pdf

And the decision to move fixed costs - to standing charges - was made as part of the Targeted Charging Review exercise that initially reported early 2019 - and a consultation response in the autumn. And you can follow the link to the TCR contained in above if really interested.

The current level of spend on grid to integrate renewables, the forecast spend of upto another £77bn in next five years alone - and more beyond - by the 3 national grid firms (NG south of border, SSEN in N Scotland and SPN in S Scotland ) however is still a very real and direct impact.

As does the increase in curtailment payments - £1bn for 11 months of 2024 - and the thermal constraint (grid limit) forecast to grow to £3bn pa by 2030 by the ESO - because we havent spent the grid money in time as the farms come onstream.

born_again

Philip_P said:

born_again said:

There is no win win situation.
Somewhere along the line we will have to pay for it either directly or indirectly, which given the inefficiencies of any government system will mean everyone will pay even more 🤷‍♀️🤣

Standing charges increased to cover all the failed energy companies bailouts. This should be funded by general taxation so that the Standing charges can revert back to their previous level

Should have been covered by the directors of the companies who failed in their due diligence in running the companies.

So what you are in effect saying is that should any company go bust, then the tax payer picks up the tab 🤷‍♀️Regardless of whether or not they use the service/products they supply.

Scot_39

matt_drummer said:

Philip_P said:

born_again said:

There is no win win situation.
Somewhere along the line we will have to pay for it either directly or indirectly, which given the inefficiencies of any government system will mean everyone will pay even more 🤷‍♀️🤣

Standing charges increased to cover all the failed energy companies bailouts. This should be funded by general taxation so that the Standing charges can revert back to their previous level

Maybe the failed energy company costs should have been borne by those who benefitted from the cheap rates offered by dodgy fly by night energy companies that didn't do their job properly.?

After all, it was only those customers credit balances that were protected and then those customers were protected again by getting their energy subsidised because decent suppliers now had to source energy for an influx of customers they hadn't planned for.

The failed energy companies were not bailed out, they failed! It was only their customers that were bailed out.

Those that stuck with established suppliers have still had to pay for something they got no benefit from.

And now you want tax payers to fund it?

In some cases like Bulb and its1.5m customers, the tax payer did fund it.
Just as it has to fund other regulatory failures elsewhere in the past.

And I don't blame a company entirely for operating under a regulatory regime that changed the pricing model on them via the initially 6m cap without changing the rules on capital reserves and hedging of supply that they were setup to run under - or even when Ofgem did - did so too little and too late for many.

Ofgem essentially allowed firms to operate on the cheap to back its free for all swap to save mantra, then imposed a market lagging cap price on them, when it was obvious it - tge race to the bottom - wasnt working to protect the customers of the big 6. 
What could go wrong in a market that has seen energy crisis about as regularly as once per decade in not too distant past, I suspect including in many of their senior staff's lifetimes., did in fact go wrong and was it 27 small to medium sized companies paid the price. 

Qyburn

matt_drummer said:

Maybe the failed energy company costs should have been borne by those who benefitted from the cheap rates offered by dodgy fly by night energy companies that didn't do their job properly.?

That's what I thought when Iresa went bust, I'd benefitted jumping between cheapskate companies like Extra, Enstroga etc. I thought it would have been fair if I'd lost my credit balance. I'd still have been better off than if I'd stayed with SSE over all those years.

But what about customers who were actually in debt when the company failed?

Qyburn

Question for those arguing that some of the S/C elements should come from general taxation. It's a justifiable argument, particularly with regard to social costs which are nothing to do with production or delivery of gas or electricity.

But the question is, should these costs be met by increasing tax, and if so which tax would you increase? Or by cutting a service somewhere, and if so which service?

For me, I'd fund it by increasing income tax.

Ildhund

Qyburn said:

I'd fund it by increasing income tax.

I suspect that the circles in a Venn diagram of taxpaying households v. domestic energy customers would almost coincide, with the crescent of difference mostly representing those who pay no income tax. The number of income-tax-payers off-grid must be very small (but all energy customers pay VAT). Could it be that most of those agitating for reduced SC pay no income tax?    

QrizB

Qyburn said:

For me, I'd fund it by increasing income tax.

You could reduce the personal tax-free allowance by £1000 but not change the bands. That would probably do it.

MattMattMattUK

QrizB said:

Qyburn said:

For me, I'd fund it by increasing income tax.

You could reduce the personal tax-free allowance by £1000 but not change the bands. That would probably do it.

If it were down to me I would lower the personal allowance to £1,000 and combine NI and IC into one income tax.

Scot_39

Qyburn said:

Question for those arguing that some of the S/C elements should come from general taxation. It's a justifiable argument, particularly with regard to social costs which are nothing to do with production or delivery of gas or electricity.

But the question is, should these costs be met by increasing tax, and if so which tax would you increase? Or by cutting a service somewhere, and if so which service?

For me, I'd fund it by increasing income tax.

Given the clear link between heat and health - perhaps bring back nhs levy or reverse at least one of 2 2% ni cuts this year.

And split between nhs and social tariffs subsidies - say to pay standing charges - for those on means tested benefits, tapering out at say min wage.

And if more needed - cancel the £600m plus giveaway to parents given the 10k threshold and new 20k band/ rate halving of the child benefit tax charge- was50-60k to zero taper, now 60-80k.

Change that should have waited until applied per household not individually.

A couple on £120k combined shouldn't need benefits.