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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 17th Oct 12, 8:06 AM
    • 2,324Posts
    • 971Thanks
    Former MSE Helen
    MSE News: David Cameron 'should fix broken energy market'
    • #1
    • 17th Oct 12, 8:06 AM
    MSE News: David Cameron 'should fix broken energy market' 17th Oct 12 at 8:06 AM
    "As millions face a bitter winter of higher energy bills, Which? has demanded the Prime Minister acts ..."

Page 1
  • yangptangkipperbang
    • #2
    • 17th Oct 12, 8:28 AM
    • #2
    • 17th Oct 12, 8:28 AM
    There is one quick, simple way to make the energy market truly competitive.
    The power companies should be forced (by Law) to sell their products in the same way as every other commodity - by simple unit price. No standing charge - no dual rate - just x pence per kWh.

    Petrol is sold by the litre - full stop ! If it was sold in the same manner as energy:
    1. You might be charged two different prices, for one tankful of petrol. The first 20 litres at a higher price then the rest at a lower price.
    2. OR - you might pay the same price per litre for the whole tankful, but the garage might charge you for "parking" whilst you fill up.
    3. You won't actually be charged the true cost of your tankful (per litre) until after you have completed your journey.
    What a farce !

    Under the present system you only know what your energy bill is going to be (per kWh) after the event. Imagine going to Tesco and being told that they wouldn't tell you the price of your bag of spuds until you have eaten them.
    • Bark01
    • By Bark01 17th Oct 12, 8:36 AM
    • 786 Posts
    • 250 Thanks
    Bark01
    • #3
    • 17th Oct 12, 8:36 AM
    • #3
    • 17th Oct 12, 8:36 AM
    There is one quick, simple way to make the energy market truly competitive.
    The power companies should be forced (by Law) to sell their products in the same way as every other commodity - by simple unit price. No standing charge - no dual rate - just x pence per kWh.

    Petrol is sold by the litre - full stop ! If it was sold in the same manner as energy:
    1. You might be charged two different prices, for one tankful of petrol. The first 20 litres at a higher price then the rest at a lower price.
    2. OR - you might pay the same price per litre for the whole tankful, but the garage might charge you for "parking" whilst you fill up.
    3. You won't actually be charged the true cost of your tankful (per litre) until after you have completed your journey.
    What a farce !

    Under the present system you only know what your energy bill is going to be (per kWh) after the event. Imagine going to Tesco and being told that they wouldn't tell you the price of your bag of spuds until you have eaten them.
    Originally posted by yangptangkipperbang
    The cost models are not comparable, you need a standing charge to cover the fixed costs that are applicable to each customer regardless of consumption. There are already moves to standardise the standing charge. If you want to use Tesco as a comparison they make 7% margin the most profitable Energy suppliers make 3-4% margin from their residential supply business.

    Energy Suppliers have to give customers 30 days notice of any changes that will negatively impact them and then they have the option of rejecting the increases for a number of weeks whilst they transfer to another supplier. So no they don't tell you about increases after you have used the product.
    • jobdone1
    • By jobdone1 17th Oct 12, 8:49 AM
    • 719 Posts
    • 540 Thanks
    jobdone1
    • #4
    • 17th Oct 12, 8:49 AM
    • #4
    • 17th Oct 12, 8:49 AM
    Government response
    However, the Government is rejecting Which?'s call for a review of energy prices.

    Is this for real" the above statement from the goverment. T

    Which? points to an energy summit a year ago involving politicians, suppliers, the regulator and consumer groups including MoneySavingExpert.com. There, the Government said it was "making energy companies competitive".

    I just give up the goverment are out of control out of touch can't organise a p*ss up in a brewery. So they have failed to produce anything out of lavish lunches over the year and hear we are as consumers once again being held to ransom with massive price increases. And look at the above qoute from the goverment we are making energy companies more competetitive . Do they think we are all thick. They should all be ashamed of themselves people are dying and having to make choices of heat or eat we are not a third world country for goodness sake but the way things are going well i will let you make your own assumptions on that.
    • WestonDave
    • By WestonDave 17th Oct 12, 9:24 AM
    • 5,038 Posts
    • 8,521 Thanks
    WestonDave
    • #5
    • 17th Oct 12, 9:24 AM
    • #5
    • 17th Oct 12, 9:24 AM
    This is low denominator populist nonsense from both Which and MSE. We cannot have gas or electricity prices which are totally isolated from global prices so if global market prices rise then our prices will rise. They will rise because as other countries develop and want technology like heating and electricity, demand rises and makes the comodity more expensive.

    http://www.energy.eu/

    This site is very illuminating (bear in mind the prices are in Euros) so the prices are about 80% of those.

    A UK consumer is paying about 3.3p per Kwh for domestic gas (including tax) with the only places having better prices being Latvia and Romania (which isn't that much cheaper and probably comes from them not having any green commitments adding to prices).

    Similarly on electricity - we are paying 11p per Kwh with only a few Eastern European countries and Greece having cheaper prices.

    So what to people expect - taxpayer subsidy of energy? Its pretty clear that our energy prices are already competitive! We probably pay a bit less than many countries as we get some of our gas from the North Sea which cuts down transportation costs compared to those countries getting all their gas piped across from Russia. The price for electricity in Denmark is nearly double our price!

    There is a lot of populist noise being made about energy prices but when our prices are already near the lowest in Europe its hard to see what can be done to make them lower. If there is an issue about affordability then its probably the income end of the equation that is the issue not the energy price. We also need to get used to the fact that as global demand for energy continues to grow, energy will become more and more expensive so we need to find ways to use less of it. How many people complaining about high fuel bills are living in homes with little or no insulation?
    Adventure before Dementia!
    • grahamc2003
    • By grahamc2003 17th Oct 12, 9:37 AM
    • 1,747 Posts
    • 1,373 Thanks
    grahamc2003
    • #6
    • 17th Oct 12, 9:37 AM
    • #6
    • 17th Oct 12, 9:37 AM
    The government force suppliers to act at tax collectors for many indirect taxes the government lumps onto our bills. Mainly 'green' costs, subsidies for very expensive wind generation for example, including tens of billions for grid infrastructure upgrades for off-shore windfarms. The actual energy cost now in our electricity bills goes lower each year. The margins are therefore higher than 3 or 4%, which is on turnover (comprising indirect taxation plus energy costs) - they are higher on just the energy turnover aspects.
    • Paul_Herring
    • By Paul_Herring 17th Oct 12, 9:40 AM
    • 6,792 Posts
    • 3,423 Thanks
    Paul_Herring
    • #7
    • 17th Oct 12, 9:40 AM
    • #7
    • 17th Oct 12, 9:40 AM
    Oh great - more demands for government intervention.

    Perhaps if we had less government intervention the prices would be cheaper. I'm mainly thinking of all the green taxes that are currently rolled up into the bills at the moment.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
    • jobdone1
    • By jobdone1 17th Oct 12, 9:54 AM
    • 719 Posts
    • 540 Thanks
    jobdone1
    • #8
    • 17th Oct 12, 9:54 AM
    • #8
    • 17th Oct 12, 9:54 AM
    gread creates a vicious circle.

    higher energy --- shops need electric higher costs past on to goods and services to us

    farmers need energy --- again higher costs past on

    So the billion in profits made by the greed of the rich causess suffering to millions
    • rogerblack
    • By rogerblack 17th Oct 12, 10:02 AM
    • 9,273 Posts
    • 9,438 Thanks
    rogerblack
    • #9
    • 17th Oct 12, 10:02 AM
    standing charge.
    • #9
    • 17th Oct 12, 10:02 AM
    A poster above raised the issue of single price per kWh, to have someone raise the 'but we need a standing charge for fixed costs'.
    Do we?


    There is clearly a rationale for not making low users pay proportionately more for their energy.
    This is slightly unfair to high users.
    But it's not like Ocado deliveries.
    People won't get more deliveries because the cost of the delivery is rolled into the price.
    • MillicentBystander
    • By MillicentBystander 17th Oct 12, 10:03 AM
    • 3,450 Posts
    • 2,225 Thanks
    MillicentBystander
    This is low denominator populist nonsense from both Which and MSE. We cannot have gas or electricity prices which are totally isolated from global prices so if global market prices rise then our prices will rise. They will rise because as other countries develop and want technology like heating and electricity, demand rises and makes the comodity more expensive.

    http://www.energy.eu/

    This site is very illuminating (bear in mind the prices are in Euros) so the prices are about 80% of those.

    A UK consumer is paying about 3.3p per Kwh for domestic gas (including tax) with the only places having better prices being Latvia and Romania (which isn't that much cheaper and probably comes from them not having any green commitments adding to prices).

    Similarly on electricity - we are paying 11p per Kwh with only a few Eastern European countries and Greece having cheaper prices.

    So what to people expect - taxpayer subsidy of energy? Its pretty clear that our energy prices are already competitive! We probably pay a bit less than many countries as we get some of our gas from the North Sea which cuts down transportation costs compared to those countries getting all their gas piped across from Russia. The price for electricity in Denmark is nearly double our price!

    There is a lot of populist noise being made about energy prices but when our prices are already near the lowest in Europe its hard to see what can be done to make them lower. If there is an issue about affordability then its probably the income end of the equation that is the issue not the energy price. We also need to get used to the fact that as global demand for energy continues to grow, energy will become more and more expensive so we need to find ways to use less of it. How many people complaining about high fuel bills are living in homes with little or no insulation?
    Originally posted by WestonDave

    Just can't be bothered to debunk this total nonsense argument again so here's the link to the thread

    http://forums.moneysavingexpert.com/showthread.php?t=4235837
    • rogerblack
    • By rogerblack 17th Oct 12, 10:39 AM
    • 9,273 Posts
    • 9,438 Thanks
    rogerblack
    On another topic - feed in tarrifs - scrap them.

    Were they important in setting up a solar installer market in the UK - yes.
    Are they relevant to today - not so much.

    The price of electricity today is comparable with the Price paid by the feed in tariff.
    FITs also have perverse incentives, that are getting worse over time.
    The FIT scheme was designed to pay subsidies to reduce carbon generation.
    It was not designed to subsidise people who are able to install panels, though this is a sode-effect.

    It is in the householders interest to (for example) run their electric water heater off solar-pv, as it's cheaper for them, they still get paid the FIT for units generates and used internally, even if those units displace gas.
    There is some small energy saving locally by doing so, and hence carbon saving.
    But by not exporting to the grid, as the FIT system was designed around, the cost per kilo of co2 saved is comparatively small, and the effective cost of the FIT scheme more than doubles.
    This will get worse over time, as installers see fitting devices to aid this as easy additional profit, and the devices become more available.

    I would argue for either: adjust the scheme so locally used units get only a small subsidy, reflecting the relative carbon saving (so perhaps 1.5p/kWh), with the remaining at the normal rate.

    Or more simply, eliminate FIT entirely, and allow net metering, where your electricity meter simply runs backwards.

    This would have the advantage of simplifying the install tarrif, and allow installations where they are now prohibited by FIT.
    Last edited by rogerblack; 17-10-2012 at 10:42 AM.
    • rogerblack
    • By rogerblack 17th Oct 12, 10:49 AM
    • 9,273 Posts
    • 9,438 Thanks
    rogerblack
    Just can't be bothered to debunk this total nonsense argument again so here's the link to the thread

    http://forums.moneysavingexpert.com/showthread.php?t=4235837
    Originally posted by MillicentBystander
    The points raised about the above argument in that thread seem at best weak.
    Certainty, if exchange rates alter, there will be transient misalignments, due to contracts being signed at differing exchange rates.
    But energy costs are fundamentally tied to the price you can buy energy on the global market.
    To simply ignore the fact that we have amongst the cheapest energy in Europe is odd.
    • undaunted
    • By undaunted 17th Oct 12, 12:09 PM
    • 1,862 Posts
    • 964 Thanks
    undaunted
    Good on which! Unfortunately I increasingly doubt that Cameron, Clegg & co. will do much more than provide more hot air. They certainly haven't lived upto promises made so far!

    As for DECC their words and promises of action would be great if they were ever actually translated into meaningful deeds for the consumer.
  • WelshGandalf
    A poster above raised the issue of single price per kWh, to have someone raise the 'but we need a standing charge for fixed costs'.
    Do we?
    Originally posted by rogerblack
    Speaking as someone who used to work for a power company - and saw the full information of how the costs were put together - yes, we do.

    Here are some things that are covered by the standing charge.
    1) The guy who reads your meter needs to be paid.
    2) The meter needs to be paid for, and replaced every-so-often (this is the law and is to reduce the chance of a meter going faulty due to old age).
    3) The distribution company that owns the cables in the local area need money to maintain them (this is paid partly in standing charge and partially on unit cost).

    These things are generally done by companies other than the supplier themselves. It's part of the liberated energy market we have - not only are there a range of suppliers, but the suppliers have a range of meter readers, meter operators etc. that they can use too.

    A meter sitting there using nothing will still cost the supplier money every year, due to the above and due to admin costs. You may not like it, but it's a fact, and it's simple business sense to pass those costs along. Suppliers who offer a zero standing charge and a flat rate mysteriously seem to end up supplying loads of empty properties and losing money because of it.

    I really don't like the MSE post saying suppliers are making "bumper profits" - yes they are making profits (something all companies try to do) but they aren't rediculous. If they made 0% the average consumer would save 50ish a year. If you're in fnancial hardship then 50 will not make everything rosy again...
    Last edited by WelshGandalf; 17-10-2012 at 12:39 PM. Reason: typo
  • annie1975
    I read my own meter,(think they might read it once every couple of years).
    How often do you have a new meter put in?.(Ive lived here 12 years and still got the same meter)..

    The government are not A**ed about doing anything about the prices,because the more the energy company's make,the more the government make in taxes.
    • spot1034
    • By spot1034 17th Oct 12, 1:00 PM
    • 66 Posts
    • 46 Thanks
    spot1034
    I read my own meter,(think they might read it once every couple of years).
    How often do you have a new meter put in?.(Ive lived here 12 years and still got the same meter)..

    The government are not A**ed about doing anything about the prices,because the more the energy company's make,the more the government make in taxes.
    Originally posted by annie1975
    The government can't really do anything about prices other than stop requiring the addition of 'green' levies onto bills, which I doubt it will be doing anytime soon. Energy costs play a significant part in the calculation of inflation, which determines by how much pension and benefit rates are uprated each year. I supect this factor easily outweighs any advantage the government enjoys from VAT if charges have to go up. It also needs the energy companies to put up huge sums in the next decade to modernise our infrastructure, and they're hardly going to do that if they are forced to trade at a loss.
  • annie1975
    Maybe the government should think about the winter fuel payments they reduced...
    And the utility companys stop paying themselves millions of pounds in wages and bonuses.
  • WelshGandalf
    I read my own meter,(think they might read it once every couple of years).
    How often do you have a new meter put in?.(Ive lived here 12 years and still got the same meter)..
    Originally posted by annie1975
    From your tone you've already made your mind up and are wilfully ignorant of evidence but for anyone else who happens to read this I'll answer...

    The data collector( http://en.wikipedia.org/wiki/Data_Collector ) and data aggregator do more than just collect out your meter reads, they have to estimate them if they can't get one etc, they charge a fixed rate per meter per day.

    As for getting a new meter installed, it depends on how long your current meter is certified for. It could be anything from 10-30 years. Brief wikipedia page here - http://en.wikipedia.org/wiki/Meter_operator
    • rogerblack
    • By rogerblack 17th Oct 12, 9:36 PM
    • 9,273 Posts
    • 9,438 Thanks
    rogerblack
    Speaking as someone who used to work for a power company - and saw the full information of how the costs were put together - yes, we do.

    Here are some things that are covered by the standing charge.
    Originally posted by WelshGandalf
    Certainly I'm not arguing that fixed costs do not exist.
    It does not have to be covered by the standing charge in principle, and could as easily, and arguably more reasonably in my view, be dealt with by a levy on units.
    (with perhaps a fixed charge in the event of a property using no power)
    • rogerblack
    • By rogerblack 17th Oct 12, 9:44 PM
    • 9,273 Posts
    • 9,438 Thanks
    rogerblack
    I read my own meter,(think they might read it once every couple of years).
    How often do you have a new meter put in?.(Ive lived here 12 years and still got the same meter)..
    Originally posted by annie1975
    As an aside, I recently (last week) had my meter replaced.
    It took perhaps 20 mins from the guy hitting the front door.

    The guy said he gets through 10 a day.
    A simple estimate of what the costs should be might be 20 quid for a new meter, 10 quid for van.
    Let's say it costs Scottish Power a grand a week to employ him, that's another 20 quid for his salary and ancillary costs.

    So, 50 quid to change the meter, and the new one has a certified life of 20 years.

    I would be interested in the actual amount of money flowing around the system generated by this, I suspect it's rather more than 50 quid.

    (I note however that smart meters are likely to be fitted before the 20 years.)
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