Plans to change what households make from solar Feed-in Tariffs 'feels a breach of pro

Qyburn

MWT said:

My understanding is that the original contract included the right for the Government to review/change the indexing method... 

That's been mentioned on every thread on this matter. Is there some way to confirm one way or another.

MWT

Qyburn said:

MWT said:

My understanding is that the original contract included the right for the Government to review/change the indexing method... 

That's been mentioned on every thread on this matter. Is there some way to confirm one way or another.

The basis seems to be that the FiT contracts depend on the underlaying legislation, 'Feed-in Tariffs Order 2012' and so can be altered by changing that legislation.

MotobimanOne

Regardless of how much money is involved the principle here is a contract should be honoured.
Feed in Tariff is with Eon not the government and it clearly says the rate is ‘linked to the RPI’.
So unless government cancels the RPI completely I expect my tariff to be linked to it.
in regard to arbitrarily changing the terms the contract I would think that was an unfair contract term under consumer rights legislation.
Here are the relevant terms and I don’t not see how the Feed in Tariff is part of the ‘fixed Export Tariff’ mentioned.
quote

5. Tariffs

5.1 Your Tariff Code, Generation Tariff and Export Tariff (as applicable) are set and provided to Us by

Ofgem. If Your Generation Tariff and/or Export Tariff are amended by Ofgem, We shall notify You as

soon as We are made aware of the amendment and if applicable, shall let You know how this will

affect any FIT Payment. We may send You a revised FIT Plan, showing any amendment.

5.2 Your Generation Tariff and Your Export Tariff are linked to the Retail Price Index (RPI). If the RPI

changes then We will tell You what the impact is, if any, in Your next Payment Statement.

5.3 The Secretary of State reserves the right to change the fixed Export Tariff rate in accordance with

the Feed in Tariff Order 2012 (as amended, modified, re-enacted and/or replaced from time to

time). If this happens, We’ll tell You what the impact is, if any, in Your next Payment.

Unquote

debitcardmayhem

MotobimanOne said:

Regardless of how much money is involved the principle here is a contract should be honoured.
Feed in Tariff is with Eon not the government and it clearly says the rate is ‘linked to the RPI’.
So unless government cancels the RPI completely I expect my tariff to be linked to it.
in regard to arbitrarily changing the terms the contract I would think that was an unfair contract term under consumer rights legislation.
Here are the relevant terms and I don’t not see how the Feed in Tariff is part of the ‘fixed Export Tariff’ mentioned.
quote

5. Tariffs

5.1 Your Tariff Code, Generation Tariff and Export Tariff (as applicable) are set and provided to Us by

Ofgem. If Your Generation Tariff and/or Export Tariff are amended by Ofgem, We shall notify You as

soon as We are made aware of the amendment and if applicable, shall let You know how this will

affect any FIT Payment. We may send You a revised FIT Plan, showing any amendment.

5.2 Your Generation Tariff and Your Export Tariff are linked to the Retail Price Index (RPI). If the RPI

changes then We will tell You what the impact is, if any, in Your next Payment Statement.

5.3 The Secretary of State reserves the right to change the fixed Export Tariff rate in accordance with

the Feed in Tariff Order 2012 (as amended, modified, re-enacted and/or replaced from time to

time). If this happens, We’ll tell You what the impact is, if any, in Your next Payment.

Unquote

In 5.3 ….. end of argument, it’s in the contract

gefnew

The UK government is phasing out the Retail Prices Index (RPI) by 2030, transitioning to the Consumer Prices Index including Housing (CPIH) to provide a more accurate measure of inflation.
Which the consultation does not give as a choice.

mmmmikey

Thanks for posting this, it goes a long way to clarifying the situation.

As far as the contractual situation is concerned, as you point out your contract is with EOn so the government has no contractual obligation to you. This somewhat negates some of the arguments presented above. Anyone in the "stuff fairness, all the matters is the contract" camp then will have to acknowledge that they have been wrongly directing their comments to the government because the contract isn't with the government.

Clause 5.1 makes it absolutely clear that the rates are set by Ofgem and if they are amended your FIT provider will let you know. It's absolutely clear form this that the rates can be amended. Under the current proposal the proposal is to amend them such that future increases are in line with CPI rather than RPI. No breach of contract there then.

Clause 5.2 does not make an ongoing commitment to rise payments in line with RPI - it places an obligation on the supplier to let you know if, as and when they change in line with RPI. Saying something to the effect of "we will let you know if the rates change in line with RPI" is not the same as saying "we will increase your payments in line with RPI". There is no commitment to keep rates in line with RPI going forward, and in fact clause 5.1 makes it clear that things can change. Again, the proposed change does not breach the contract.

Clause 5.3 relates only to the Export Tariff so as you point out is only relevant to that part of the agreement.

Hopefully this clears up any concerns that folks have about the contractual aspects of this, as it's absolutely clear from this that the contract would not be breached if the proposed change goes ahead.

mmmmikey

MWT said:

ppppenguin said:

When I signed up for FIT, both parties agreed to RPI indexing for 25 years. Regardless of fairness or accuracy, a contract is a contract and cannot be changed unilaterally by one party after the event. It is fundamentally dishonest to attempt to change the terms of contract part way through. It is also an abuse of power, using the overwhelming power of government against parties who, for the most part are private individuals of limited means who have limited ability to fight this in the courts.

In any case, it's a historic matter, as there have be no new FIT contracts since 2019.

My understanding is that the original contract included the right for the Government to review/change the indexing method... 

Thanks, the extract provided above has proved you to be correct

mmmmikey

gefnew said:

The UK government is phasing out the Retail Prices Index (RPI) by 2030, transitioning to the Consumer Prices Index including Housing (CPIH) to provide a more accurate measure of inflation.
Which the consultation does not give as a choice.

The consultation is not simply offering people a choice between two options. It is outlining two options that the government is considering at the moment. As well inviting people to comment on those two options - specifically which option do they think is better (or less bad depending on your perspective), you are also invited to make alternative suggestions. Specifically, it says:

"Do you think there are alternative approaches that should be considered, and if so, what are these and why?"

So you are explicitly invited to put forward ideas such as your suggestion that CPIH could be used instead and outline why you think that should be done. This is a consulation intended to gauge public opinion, not a vote on two options.

As well as this, you are also invited to say whether you think CPI is fairer or not, and make any comments you wish on the impact of the proposal.

Personally, I think this is all a bit of a storm in a teacup and I think the proposal to switch to CPI going forward is perfectly reasonable in the current financial climate, and intend to respond to that effect. However, I think the "back-dating and clawing back" suggestion goes too far. I will be responding accordingly. I'd encourage everyone with strongly held views on this, regardless of what those views are, to participate in the consultation constructively by responding to the questions asked.

Ectophile

debitcardmayhem said:

MotobimanOne said:

Regardless of how much money is involved the principle here is a contract should be honoured.
Feed in Tariff is with Eon not the government and it clearly says the rate is ‘linked to the RPI’.
So unless government cancels the RPI completely I expect my tariff to be linked to it.
in regard to arbitrarily changing the terms the contract I would think that was an unfair contract term under consumer rights legislation.
Here are the relevant terms and I don’t not see how the Feed in Tariff is part of the ‘fixed Export Tariff’ mentioned.
quote

5. Tariffs

5.1 Your Tariff Code, Generation Tariff and Export Tariff (as applicable) are set and provided to Us by

Ofgem. If Your Generation Tariff and/or Export Tariff are amended by Ofgem, We shall notify You as

soon as We are made aware of the amendment and if applicable, shall let You know how this will

affect any FIT Payment. We may send You a revised FIT Plan, showing any amendment.

5.2 Your Generation Tariff and Your Export Tariff are linked to the Retail Price Index (RPI). If the RPI

changes then We will tell You what the impact is, if any, in Your next Payment Statement.

5.3 The Secretary of State reserves the right to change the fixed Export Tariff rate in accordance with

the Feed in Tariff Order 2012 (as amended, modified, re-enacted and/or replaced from time to

time). If this happens, We’ll tell You what the impact is, if any, in Your next Payment.

Unquote

In 5.3 ….. end of argument, it’s in the contract

Feed In Tariff is completely unrealated to how much you export.  FIT is paid on how much you generate.  I get paid for both FIT and export.

MotobimanOne

How does the Consumer Rights 2016 impact on the contract?
Firstly the contract is for a fixed period of 25 years so if the government delete the RPI then clause 5.2 cannot be actioned as it clearly links the tariff to the RPI.

This would mean the contract terms 5.2 and 5.3 cannot be completed by Eon so they would apparently be in breach and it raises the question would they be required to compensate under general breach of contract rules?

Secondly there is a clause that allows Eon to cancel the contract in certain circumstances including changes by government but again would this be an unfair contract term?

quote

17.4 We may change these Statement of Terms. We will display any changes clearly on eonext.com.

If any changes to these Statement of Terms are of a disadvantage to You, We shall tell You about the

changes at least 30 days before they begin to apply or upon notice if the change is the result of any

change of law, relevant licence, agreement, guidance or code made by Ofgem or the Secretary of

State (or such other authoritative body).

Unquote