Zero standing charge tariff proposal

gm0

*Some* of the recently failed new suppliers were well dodgy.  A failure of scrutiny in issue of licenses due to a desire for more new entrants and competition applying an overly optimistic hand to the scales.

The owner/directors of the worst examples made out like bandits on their own pay and rations and took a 2nd drink via the use of related party companies - used as supplliers or consultants to the business - procurement of things owned by family.  Achieved customer growth via unsustainable tariff prices.  Inadequately or completely unhedged against wholesale prices.  Loaded the company as best they could with corporate debt with an "optimistic" business plan based on assumptions designed to prolong the scam.  Lag on reporting and accounts. And then at some point based on the actual spot price of energy over time.  And other government actions (caps).  The financial roof falls in and they dump the wreckage onto SOLR.   Nice work for spivs chancers and rogues.   The alternative would be if the forward curve co-operated vs tariffs and they proved able to sell the customer book to a bigger supplier for a different financial exit. Either way up the founder managers win.  And the rest of us pay for it via SOLR levy.  It's right on the edge between fraud.  And legal.  Usually being chancers and spivs they screw up on the detail and tip over into fraud.  But with a couple of well timed flooded offices and destruction of all corporate records.  Hope to get away with it anyway.

A different shape problem to the high cost base traditional suppliers with millions of customers rather than 10s to 100s thousands and little history.  They have their own problems for sure.  But this kind of right on the edge of legal spivvery is generally not one of them. 

Their finance and tax planning will also use the rules as they are to optimise.  That's what companies do. 

Of course RPI-x % regulation will come around on the baggage carousel again in the end.

This is a complexity victim of government inabilty to create losers via simplification. 

Add a new thing. Add a new levy for this "positive" change we are making.  Increasing the complexity of the overall and perverse incentives be damned.

It's sad.  I was involved in this back in the 90s - the social action tariff and fuel poverty issue was a contemporary concern back then - some 30 years ago.  The situation has not got better.

Scot_39

wrf12345 said:

New s/c's out today for April, up for gas, down for electric - by quite a lot - in most areas except London. Vast amounts of excess money swirling around the large energy retailers that would more than cover getting rid of s/c's.

Losses at many during the crisis and £3.7bn innbad debts  suggest otherwise.

As do nearly 30 collapses.

Ofgem overdid compensation for 6m is true - but unlikely to repeat.

Ildhund

Does it look as if the expanded Warm Home Discount scheme will add another 9-10% to the standing charge?
Total no. of customers 25M x £196 p.a. (electricity only) = £4.9Bn
New WHD recipients 3M x £150 p.a. = £450M

superkoopauk

£14 a year I reckon - to be split across both fuels