Should I get a price capped or green energy tariff? Article Discussion Area

patchwork_cat · 22 July 2008 at 6:38PM

Further to Centrico's predicitons of massive price rises, I was advised by BG to cap. I now note that oil prices are dropping; is this likely to mean that prices aren't going to rise at the same rate, or do oil prices have no reflection at all on gas prices?

DaveK · 23 July 2008 at 2:43PM

Gas follows oil prices with a 6 month time lag normally. This seems to confirm my suspicions of a move to get us all on to a capped rate so when it comes down they're all smiling!

Paul_J · 23 July 2008 at 10:27PM

I believe the points raised by DaveK and Erikin are very valid and really do hold water.
There has absolutely GOT to be something in it for these fuel companies. They aren't in the business of saving you money, they are trying to make money from you. Nope, too fishy for me.

I've decided I'm sitting this one out for the foreseable. I'm on E-ons energy online extrasaver 5, and am sticking with it.
As said above, opting for a sudden big increase (as in a fixed price) now rather than the staged ones is probably going to work out around the same anyway IF these hooooj increases happen. Look how long we could be paying the higher priced fixed tarrif rates before any increase actually happens. Leaving us more out of pocket than if we just took the gradual rises on the chin.

Sorry, I'm not buying all this baloney the media and fuel co's are feeding us.

Andreg · 23 July 2008 at 11:57PM

DaveK you've made me suspicious now. But these are capped deals not a fixed price. Most of them allow you to move to a different tariff with no (or little) penalty. So by paying a 7%approx premium immediately that gives you an option to continue at that price or move to a variable rate tariff later.

I doubt that energy companies can make a profit offering capped deals at that price, but then I dont know the price of gas/elec options in the wholesale maket. Its quite possible though that they are not hedging their exposure in the wholesale market and instead are taking a stupid risk that may cost them a lot of money. Sometimes apparently sensible companies do take stupid risks - look at the banks lending right up to the peak of the housing market!

craggs · 24 July 2008 at 4:26PM

Im not sure on this one either,its going to cost me around 24% more to move to scottish powers capped 2009,im on the online energy 4 with them,,which is pretty cheap ATM!

so obviously im thinking its gotta raise by more than that before im on a good deal,and with the oil prices coming down,the gas prices should follow,you would assume

However on the other hand im thinking do the supply companys know its raising as there seems to be a lot of companys pulling the capped products.

which might give an idea its going up and up and up

im on the fence for now.

markbloke · 24 July 2008 at 5:22PM

Like many I'm reluctant to move to a 20% extra capped tariff on the basis of an unknowable market. I'm currently signed up to E-ON Super Saver Online V5 (it was the snappy name that hooked me) and that's still a good deal for me.
I guess if energy prices increased by an average of over 20% for the year until October I could just shift to someone else and use the Quidco commision to help soften the blow.
What concerns me about capping until 2009 is that there is no reason to believe that prices would drop back again if the were forced up by as much as 60%. OK it might save a couple of hundred quid but if you're paying jacked up prices for another decade you can forget the small change. For this reason I've also taken steps to reduce my energy useage and so compensate for increases in costs. Using an efergy smart-meter I'd estimate I've cut back about 20% of electricity and installed better central heating controls (7 day timer and programmable thermostat) to reduce gas consumption. The impact of this on daily life for myself and family is nil or negligible (apart from me cursing the smart-meter whenever the freezer switches on).

Theo_Cupier · 24 July 2008 at 9:32PM

Ach, such confusion.

Currently on Southern Electric's Better Plan, so doing a bit for the environment (they generate a unit of hydro for every unit we consume).

Thinking about moving to a cap or fixed rate but they seem thin on the ground now...

Options:
1. Stick with the current uncapped/unfixed green(ish) deal
PROS:
+Southern Electric seem to be playing the role of industry good guys at present - last to raise prices last time, not a big rise either, quoted in the Guardian today as saying they will hold off as long as possible before raising prices
+ we have an existing relationship with them and their customer service is good
+ because of both the above, I think it might be 18 months before we have to increase our monthly payments - if they raise them this autumn, I will resist their suggestions that we increase monthly payments until we've been on the higher rate for a full calendar year. I've done this before with them successfully
+ it's greenish
CONS:
- no long term insulation against price rises
- can't liquidate my current account credit (SE owe me about £75 at the moment)
- no switching incentive payment

2. Move to "Fixed Discount 2010" still with Southern Electric
PROS
+ seems to be effectively a tracker rate, undercuts their standard energy price by 2% until 2010
+ can carry my existing credit into the new tariff
+ same customer service pros as Option 1
+ would allegedly save 5% (£80) on current deal with Southern Electric
CONS:
- it's a tracker, not a fix so not completely insulated from price rises
- can't liquidate my current account credit
- no switching incentive payment
- it's not as green

3. Switch to NPower Sign Online 12 Paperless billing
PROS
+ instantly save 20% on current deal (c. £300)
+ liquidise the account credit with current provider
+ get a switching payout from one of the switching sites
+ only end up out of pocket if any future price rise is 20% greater than Southern Electric's price rise
CONS
- still not a fix/cap, no insulation against price rises
- NPower don't have the same reputation for late, small price rises
- worse customer service reputation
- not green
- possibly less leverage with supplier over when to increase monthly payments

4. Switch to Fixed rate deal
PROS
+ insulated against price rise, fix costs
+ liquidise the account credit with current provider
+ get a switching payout from one of the switching sites
CONS
- cheapest fixed rate is 5% (£80) higher than current tariff
- fixes only last a year or so, will the market have come down by then?
- Not green

I don't NEED to fix my rate, insofar as there is slack in my finances (but I'd rather spend it on fun things than more expensive energy). Does anyone have any views on the dynamics of these options?

Am I likely to regret a switch to NPower - either financially or in terms of customer service? Am I in danger of switching to someone who will be cheap for about a month then very soon raise their prices to the point where I am suddenly paying more than if I'd moved?

Is the Southern Electric tracker rate worth bothering with? £80/year to stay on the green plan almost feels like a price worth paying.

Or is the only logical option to suffer the short-term price rise of moving to a fix, because any other option will soon see me paying extra?

Your views appreciated.

EagerLearner · 25 July 2008 at 12:17PM

EDF have just announced another price rise - was on the BBC website:
http://news.bbc.co.uk/1/hi/business/7525105.stm
Others are expected to follow.

We are with E.On and took the plunge to fix a couple of weeks ago... hopefully worth it but then again oil price has been lower lately... aargh!

shieldsy · 25 July 2008 at 10:20PM

I've got same dilemma. Comparison sites all saying I'd pay about 20% extra to go on capped tariff. If prices rise by 60% then that's obviously a bonus. BUT, oil prices are now dropping. So in 6 months we should see gas prices dropping too.

Also, most of the capped prices only last 12 months - so it's a very short term gain, especially if the 60% increase Martin mentioned doesn't take effect til start of next year ... it'll result in only a 6 month cap.

I'm tempted to sit tight just a little while longer. But interested to see what the consensus is.

mordent_smiley · 26 July 2008 at 7:43AM

Aaaaaah! I was just about to cap until I read this thread! Now I don't know what to do! I'm on scottish power dual online saver 4 and it would cost me 16% increase to cap with scottish power until 2009. This may be a stupid question but can you use energyhelpine/uswitch if it's the same supplier?

Should I get a price capped or green energy tariff? Article Discussion Area

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