Energy prices

[ProfJohnL]

Several people have said that the fuel prices are a rip off, and whilst steep price rises sometimes do feel as though some one is profiteering, its easy to point the finger at the wrong companies.

No company can survive without making a profit, its no use just breaking even, as that fails to take account of inflationary growth. So don't condemn profit for the sake of the name, its really a question of the profit ratio and is that excessive or not.

We have seen a number of energy retailers who have gone to the wall becasue their profit margins were insufficient to cover the rapidly escalating energy prices from the producers. The UK has regulation of retail energy prices, and its that restriction that has prevented the companies from garnering enough reserves to purchase enough energy for their customers.

Those same pressures are also present for the surviving energy retailers, but the difference is the larger companies have a different and more divers business model which spreads the risk, and perhaps they have been more savvy and have reserves to deal with the energy price volatility.

 

[ProfJohnL]

I'm not condoning the large increase in standing charges, but:-

Take two identical houses that are next door in the same street. One house has a family of five and the other has a single person. The house with five uses a lot of energy, the house with one used very little, yet both houses have the same type and size of supply pipes and wires all of which needs to be maintained. So why should one house pay less for the same facilities than the other?

It's a matter of consumer choice on how much energy to use, but to use that energy you do need to be connected to whichever system you want or need, and that has a cost.

That's why the standing charge is 'fairish' way of ensuring that all users contribute towards the maintenance of the system irrespective of the amount of energy they use especially those who use relatively little energy.

I do think the companies should justify and explain why their standing charge has increased so much. No increase is welcome, but the standing charge increase in cost per year pails into insignificance compared to the recent energy price rise.

 

[Buckman]

I have sort of been monitoring our consumption and have noticed that it is the shower that uses the most energy as it is 8kw. Showering probably takes about 5-10 minutes depending on whether washing hair or not. I cannot see a way around this.
In the caravan all the hot water comes from one boiler so probably no sudden high usage data.

 

[Trevormc]

As for the daily charge BG has put ours up 92% yet in parts of the south it only went up about 6%, how do you work that one out. BG has different rates around the country , Why it should be the same every where.
Rant over

Trevor

 

[Buckman]

As for the daily charge BG has put ours up 92% yet in parts of the south it only went up about 6%, how do you work that one out. BG has different rates around the country , Why it should be the same every where.
Rant over

Trevor

Different distribution companies have different prices i.e. East Midlands Electricity Board (EMEB) may have a different price to Npower which is in the Midlands. BGAS is only a supplier i.e. they issue the bills..

 

[otherclive]

This article may explain the rationale behind the standing charge increases and variations around the country.

Why is my standing charge up by 80%? Energy firms pile on the agony

Such fees are added before you’ve even used any fuel, and look set to increase already sky-high bills by £73 a year

www.theguardian.com

 

[Buckman]

This article may explain the rationale behind the standing charge increases and variations around the country.

Why is my standing charge up by 80%? Energy firms pile on the agony

Such fees are added before you’ve even used any fuel, and look set to increase already sky-high bills by £73 a year

www.theguardian.com

Everyone can accept a cost of living increase and live with it, but why have costs almost doubled in the space of a year for those third parties that are paid from the standing charge income.
Has the Meter Operator, Data Collector and Date Aggregator costs doubled in the space of less than a year? Has the cost for maintaining the network doubled in the past year? Has the cost of paying commissions doubled in the past year?
Will the remaining suppliers profits be double at th end of the year? More than likely!

 

[otherclive]

Everyone can accept a cost of living increase and live with it, but why have costs almost doubled in the space of a year for those third parties that are paid from the standing charge income.
Has the Meter Operator, Data Collector and Date Aggregator costs doubled in the space of less than a year? Has the cost for maintaining the network doubled in the past year? Has the cost of paying commissions doubled in the past year?
Will the remaining suppliers profits be double at th end of the year? More than likely!

I think that part of the standing charge now helps to pay for customers transferred from failed supply companies. As even on a capped SVR the rate Is below what should be the real rate for energy.

 

[Dustydog]

I think that part of the standing charge now helps to pay for customers transferred from failed supply companies. As even on a capped SVR the rate Is below what should be the real rate for energy.

If you are correct Clive then I can appreciate why P&O Ferries have hot away, so far, with their Law breaking as indeed many others in high places with Green work permits snd tax dodges.
Why should I as an honest customer subsidise those who chose less stable provides🤔

 

[Buckman]

I think that part of the standing charge now helps to pay for customers transferred from failed supply companies. As even on a capped SVR the rate Is below what should be the real rate for energy.

Maybe, but no one told the supplier that they must take on those customers. It also seems that by reading Martin Lewis's website, the majority have been transferred to BGAS . Previously a few years ago when our supplier went bust, we were also transferred to BGAS.
More annoying is that customers were not given an option to choose their own supplier as we would have gone anywhere else except BGAS! However I do appreciate that it would have been very difficult and perhaps chaos to allow customer to make their own choice.

 

[otherclive]

If you are correct Clive then I can appreciate why P&O Ferries have hot away, so far, with their Law breaking as indeed many others in high places with Green work permits snd tax dodges.
Why should I as an honest customer subsidise those who chose less stable provides🤔

After the 2008 financial crisis banks were required to ensure they could better resist future shocks to the system and were/ are regularly stress tested and report to the regulator. In part the collapse of so many energy suppliers, plus one still being supported by HMG (taxpayers) is a failure of regulation. But even with better regulation it may have mitigated against some of the failures, it would have taken exceptional foresight or pessimism for a regulator to predict such a large rise in energy prices.

Have P&O got away with it? Seems a massive own goal as their ferries have brought no income since the announcement, but costs remain, and they are now being investigated. Jury out on that one but look forwards to where the investigation leads.

 

[Dustydog]

After the 2008 financial crisis banks were required to ensure they could better resist future shocks to the system and were/ are regularly stress tested and report to the regulator. In part the collapse of so many energy suppliers, plus one still being supported by HMG (taxpayers) is a failure of regulation. But even with better regulation it may have mitigated against some of the failures, it would have taken exceptional foresight or pessimism for a regulator to predict such a large rise in energy prices.

Have P&O got away with it? Seems a massive own goal as their ferries have brought no income since the announcement, but costs remain, and they are now being investigated. Jury out on that one but look forwards to where the investigation leads.

Itvwillnall come out in the wash.
If your surmise about the likes of us subsidising others energy bills, then I am not happy.

 

[otherclive]

Itvwillnall come out in the wash.
If your surmise about the likes of us subsidising others energy bills, then I am not happy.

Government rescue of Bulb Energy set to cost taxpayers billions more

Keeping Bulb Energy running will potentially cost taxpayers billions of pounds more than has currently been set aside.

bmmagazine.co.uk

 

[Hutch]

I am still with Bulb, and the prices have gone up as expected,

I still do not understand about price caps, I have to pay for the fuel that I use and I estimate for our usage unless I change the way we heat the house and the water, we will be paying between £2500 to £3000 for the year. Where and how does this capping work.

I am thinking it might be cheaper to heat the water by electric rather than gas.

 

[otherclive]

I am still with Bulb, and the prices have gone up as expected,

I still do not understand about price caps, I have to pay for the fuel that I use and I estimate for our usage unless I change the way we heat the house and the water, we will be paying between £2500 to £3000 for the year. Where and how does this capping work.

I am thinking it might be cheaper to heat the water by electric rather than gas.

It only caps the tariff rates.

 

[Buckman]

I am still with Bulb, and the prices have gone up as expected,

I still do not understand about price caps, I have to pay for the fuel that I use and I estimate for our usage unless I change the way we heat the house and the water, we will be paying between £2500 to £3000 for the year. Where and how does this capping work.

I am thinking it might be cheaper to heat the water by electric rather than gas.

It is huge increase in the standing charge that is annoying most people. Not everyone is the position to pay between £2500 and £3000 per annum of electric. If they are only earning the minimum wage and have 2 - 3 kids plus a wife to support, plus they need to get transport to work each day then they will be in for a very hard time. They may be on the minimum wage because of a change in circumstances i.e. company went into admin etc. Got that T shirt.
The huge sudden and unexpected increase is a big concern to many on low wages including those on pension even if you have additional occupational pensions. 😢
This is the problem when any country becomes too reliant on another country for basic resources.

 

[otherclive]

It is huge increase in the standing charge that is annoying most people. Not everyone is the position to pay between £2500 and £3000 per annum of electric. If they are only earning the minimum wage and have 2 - 3 kids plus a wife to support, plus they need to get transport to work each day then they will be in for a very hard time. They may be on the minimum wage because of a change in circumstances i.e. company went into admin etc. Got that T shirt.
The huge sudden and unexpected increase is a big concern to many on low wages including those on pension even if you have additional occupational pensions. 😢
This is the problem when any country becomes too reliant on another country for basic resources.

Even in France which has a significant output of nuclear electric the prices have risen a lot. It’s the crux issue of this weekends Presidential election. So it’s not just a UK problem it’s affecting most countries. With the wealthier countries able to pay higher prices it’s having a knock on effect on the least wealthy countries too. But as your post says it really puts some people and families in a very difficult position.

 

[Hutch]

We have a lot of young familys around us that have fitted Airconditioning units to their homes, I hate to think how much they will be costing them if we have a warm summer.
I will not be running our hot tub this summer, as that still needs to be heated, to be enjoyed in the evenings. Windows open and fans running.

 

[Hutch]

I have just read this item, very informative. I am a lot more wiser.

https://www.moneysavingexpert.com/utilities/what-is-the-energy-price-cap/#:~:text=The%20price%20cap%20is%20calculated,price%20cap%20from%201%20April

.

 

[otherclive]

I have just read this item, very informative. I am a lot more wiser.

https://www.moneysavingexpert.com/utilities/what-is-the-energy-price-cap/#:~:text=The%20price%20cap%20is%20calculated,price%20cap%20from%201%20April

.

Thanks a useful summary and very informative. Re the families with air con installations they have a choice of whether to use it or not, even in a hot summer it’s not essential, whereas heating in winter is.

 

[Buckman]

We have a lot of young familys around us that have fitted Airconditioning units to their homes, I hate to think how much they will be costing them if we have a warm summer.
I will not be running our hot tub this summer, as that still needs to be heated, to be enjoyed in the evenings. Windows open and fans running.

Actually many air cons draw a maximum of about 4amps and switch on an off so may not make a big difference overall?

 

[JTQ]

Actually many air cons draw a maximum of about 4amps and switch on an off so may not make a big difference overall?

If an AC unit is not using much energy, then arguably it is not needed as without using quite a bit of energy it can't be doing much cooling either.

 

[Buckman]

If an AC unit is not using much energy, then arguably it is not needed as without using quite a bit of energy it can't be doing much cooling either.

We had no issue with ours last year when on a metered site. Cooled the caravan effectively and we used less than £2.50 a day for everything.

 

[otherclive]

We had no issue with ours last year when on a metered site. Cooled the caravan effectively and we used less than £2.50 a day for everything.

Wouldn’t a domestic unit be more powerful and draw more power?

 

[Buckman]

Wouldn’t a domestic unit be more powerful and draw more power?

A lot depends on the size of the room is is cooling and temperature to which you are cooling. If cooling down to 16C when outside temperature is 28C you are going to use a lot of power. Cooling to between 18-20C not much difference.
I do not recall sudden large bills in summer as they did not vary much from the winter consumption and we never used heating in the winter.