Energy price increases

[otherclive]

Maybe I am misunderstanding, but I am not sure why the newly selected larger supplier would be loosing money of many of their current customer contracts as the energy may have been bought a year or more ago when prices were lower? Except for defaulters the customers are not loss making and are again.
My guess is that energy companies go under because they can no longer service their debts. They operate on a very fine profit margin based on the belief that all their customers will be paying on time by DD.
If you get a number of customers defaulting, the energy company cannot pay its creditors and if it cannot pay its creditors it cannot buy more energy as no money in the kitty. Also it does not help when the Big Six push up the prices of the energy they are buying making it difficult for a smaller supplier to buy energy anyway.

The customers who are not on contract with a fixed tariff or those having to use prepayment meters have capped rates which are loosing the company money, as while some of the energy will have been bought in advance the supplier is still having to buy in advance as if they don’t there will be a gap in supplies downstream. They can decide to delay longer term purchase but only for so long.

 

[Buckman]

The customers who are not on contract with a fixed tariff or those having to use prepayment meters have capped rates which are loosing the company money, as while some of the energy will have been bought in advance the supplier is still having to buy in advance as if they don’t there will be a gap in supplies downstream. They can decide to delay longer term purchase but only for so long.

Actually the other way around i.e. if in contract cost per kw is 20p if out of contract the cost could be 50p or more a kw. The customer would have no choice except to pay the Out of contract rate as the supplier to those premises can charge any amount per kw which is why it is best to either change suppliers ASAP or to set up a contract with the supplier ASAP. It normally takes a minimum of 2 weeks to change supplier but generally the time scale is about 3 - 4 weeks.

 

[JezzerB]

Contract or not-we've been passed to OFGEM and given a British Gas fixed till April rate but it is a pay quarterly bill and it clearly states we have no obligation to remain with them and there's no get out clause etc-needless to say am looking hard and switching-Neon Reef or Octopus Go seem the best -just got to decide!

 

[Buckman]

Contract or not-we've been passed to OFGEM and given a British Gas fixed till April rate but it is a pay quarterly bill and it clearly states we have no obligation to remain with them and there's no get out clause etc-needless to say am looking hard and switching-Neon Reef or Octopus Go seem the best -just got to decide!

Sad part is none of us know whether they will still be around in 6 months time as both are relatively small suppliers, but better than nothing.

 

[Sam Vimes]

Being somewhat of a nerd and because energy efficiency in general is of interest me I take readings of our electricity usage each week along with how many hours the solar pump has run - its for hot water only. I have these readings for the last 11 years.

Smart meters don't really help you save energy. They give you an indication of what you're using but in order to save energy you're the one that needs to take the action. So, for example querying why you seem to have a high reading might indicate you've left something on. I've had an energy monitor for many years and I can confirm what recent reports suggest and that's they are mostly ignored after the novelty of having one has worn off.

Of course there may be some tarriffs that appear to give a better price if you have a smart meter installed. I've never found one and I review my supplier every year.

Smart meters are not mandatory but as alluded to previously some contracts may require that you have one.

Smart meters don't work everywhere. There would be no point in having one in our house - I don't want one anyway - as there's no mobile signal.

For a couple of years I was with Yorkshire Energy as at the time they had the best price for us. Somewhile back they went bust, way before this previous crisis, and we were switched to Scottish Power, which not only honoured the existing contract with YE - including getting our credit back - but also had the best price once the changeover period had expired. This is now the second year and we've stayed with them - based on price.

A few years back it used to be that you could make cost savings by switching around but in my opinion this is not so much the case these days. If you've been concientous in checking and switching you've probably gone as low as you can. Plus all the 'new customer' deals seemed to have disappeared.

 

[JezzerB]

Like you I have my doubts about Neon Reef-small and they take a big chunk of money up front for the first 6 months-to purchase the electricity and then drop the monthly payments-worries me if they do go but likewise maybe a good model to safeguard them-Octopus have just received major investment and getting a lot of the bust company business-so think they might make it! But who knows!

 

[Buckman]

Like you I have my doubts about Neon Reef-small and they take a big chunk of money up front for the first 6 months-to purchase the electricity and then drop the monthly payments-worries me if they do go but likewise maybe a good model to safeguard them-Octopus have just received major investment and getting a lot of the bust company business-so think they might make it! But who knows!

You are right to be concerned about Neon Reef especially taking a couple of months money up front. Not an issue if the DD is taken on the 1st day for a month is advance.
Octopus is a fairly newcomer into the market in comparison to the Big Six so only time will tell, but as a consumer even if they went bust, it should not cost the consumer anything, but in the meantime there are savings to be made.,

 

[Raywood]

I would not want to pay a couple of months up front with a new company. Octopus are a bit cheaper than the others but only just but possibly that still attracts you. They are well financed and have had considerable investment, including he latest one and despite being fairly should be one of the survivors, particularly as a lot of their income comes from sales abroad. They have only taken on the customers of one of the failed companies, so are not overstretching themselves there.
The big question though is when you get a new provider which of their tariffs do you take. The variable one will be he cheapest for now, but if there are further increases the longer term ones might be better, and they allow you to fix your rate so you know what you will be paying. It is a gamble either way.

 

[Buckman]

The big question though is when you get a new provider which of their tariffs do you take. The variable one will be he cheapest for now, but if there are further increases the longer term ones might be better, and they allow you to fix your rate so you know what you will be paying. It is a gamble either way.

If you are allocated another supplier by Ofgem due to yours going bust you are under no obligation to stay with them and can move to another supplier of your own choosing. Generally if they do not keep you on your previous tariff same as your previous supplier, I think they may be obliged to put you on their cheapest 'out of contract' or variable tariff where you are not in contract to them.

 

[Dustydog]

There’s a very sad side to this thread.
A lot of innocent people have invested in these “pop up “ cheap providers. One in the Public Domain has just gone into administration causing investors to lose everything.One ordinary chap had invested his inheritance of £150, 000 last year.Now worth zero.

 

[otherclive]

There’s a very sad side to this thread.
A lot of innocent people have invested in these “pop up “ cheap providers. One in the Public Domain has just gone into administration causing investors to lose everything.One ordinary chap had invested his inheritance of £150, 000 last year.Now worth zero.

Administration is aimed at helping a company get through difficult times although it may look different if it does exit again. If not either liquidated or possibly sold on with debts being effectively wiped. But in the current climate it’s unlikely that any of the energy companies getting into this situation will be saved in any shape that recognises the investors. It will be difficult for many.

 

[JezzerB]

Not sure why anyone would invest all their money in one basket so to speak-very , very risky imo. In terms of stocks and shares and I do have some-not many, I follow my dad's mantra, if it's a risk, never risk more than you can afford to lose!

 

[RogerL]

Not sure why anyone would invest all their money in one basket so to speak-very , very risky imo. In terms of stocks and shares and I do have some-not many, I follow my dad's mantra, if it's a risk, never risk more than you can afford to lose!

We have our investments in 15 unit trusts, each of which holds around 20 stocks/shares - that way the risk of a single company failure is minimised, and in any case I'd hope the unit trust managers would see trouble brewing before I might.

 

[bertieboy1]

Gas and Oil prices seem to be increasing which has the knock on effect of raising prices of electricity. However, I'm with Scottish Power which is 100% green from their own wind farms. So, my electricity prices shouldn't affected much - right!

Which also got me thinking - When I get my volts, how do they filter out all the non- green stuff?

I don't think they know,You don,t know where the electricity comes from - Could be French

 

[otherclive]

All green energy really means is that your “ green “ supplier has purchased sufficient energy from green sources and sold that energy on to their customers. Practically it’s not possible to direct that energy to specific customers. But if you have bought 4000 kwhrs that amount is fed into the system. It doesn’t matter if it comes to you or anyone else. You’ve bought it and your supplier has had it fed into the network.