Energy bills, government ‘help’ and the like

[Paul H]

Writing to see what happens with mine.  I haven't had the full £400 rebate, my DD is £40, so that's what's been refunded, 6 x £40.

[orraloon]

What's ticking me off (apart from disjoint between gas and oil futures prices and the OFGEM pricing structures) is a 21.7% hike in daily standing charge for electricity from April.  Ok varies by region but here will rise to 61.66p per day.  That equates to £255 per annum.  If the house was empty and switched off.

My last fixed (remember those things?) price deal, which expired in May 22, perfect timing, had a daily charge of 7.77p.

[rogerzilla]

The standing charge hike was primarily to bail out customers of Bulb.  Turned out you were the credit insurer of last resort.

[felstedrider]

The standing charge hike was primarily to bail out customers of Bulb.  Turned out you were the credit insurer of last resort.

And quite a few other suppliers that went to the wall around the same time.   It has always been this way, though - it's just the numbers are so much bigger.

The actual losses on Bulb are going to be less than was forecast due to the collapse in energy prices.   Q1 power was at £900 at one point but day ahead just traded @ £82.   OK it's warm and it's windy but still we're almost back where we were before the gas supply issues started.

What will be interesting is the terms of the Bulb sale to Octopus which are a little opaque.   It seems like Octopus received subsidies and loans to allow them to take on all the customers in one hit.   Centrica have kicked off because they weren't offered the same terms (after they walked away from the deal) and it's all in the high court.   With prices dumping Octopus will have made a windfall profit on the Bulb book but I suspect they will have to hand at least some of this back to Ofgem/BEIS - provided someone there negotiated this correctly.   I'm not sure we will ever really know.

[felstedrider]

The stories I have been told about how the Government subsidy schemes have been managed….

In better news Ovo offering a 1yr fix at a discount to the cap as an acquisition tariff.  Competition may be starting again.

Also Ovo put a bid in to buy Shell’s UK supply business.   (Shell provide all of Ovo’s wholesale power & gas so this looks like a side deal to keep everyone happy).

[Mrs Pingu]

Interesting article today about how we could be making energy cheaper.
https://www.theguardian.com/commentisfree/2023/apr/05/reduce-average-uk-electricity-bill-public-ownership-clean-energy

[Mr Larrington]

Butbutbut, that’s COMMUNISM!!1!

[quixoticgeek]

Got an email from my UK energy company:

We'd love to hear your feedback on your experience with us. This survey will   
take approximately [___INSERT TIME ESTIMATE___] to complete. Thank you in     
advance!
Sincerely,                                                                     
[___INSERT YOUR NAME___]

Doing well it seems...

J

[robgul]

Interesting communication from our energy supplier, British Gas - our "ridiculously cheap" fixed deal ends on 30 April 23* - they sent a "Loyalty Jun24" offer that has no exit fees etc (so presumbaly leave when you like for another BG tarif if prices fall - but a fee if you leave BG, fair enough)

On their estimated consumption which is within a gnat's crotchet of actual the Standard Variable is £3516 and the Loyalty offer £3190 - seems worth a punt for £300+ . . .  unless there's something I'm missing on the get-out if prices fall aspect?

What's slightly worrying is that their figure quoted in the comparisons on the offer for our current tarif is  £3492 - whereas it's actually £2262 (that's gross, i.e. excluding the recent Govt contribution discount) - I've asked the question about errors, not holding my breath on a reply.


*that's on quarterly bills, pay by DD (NOT an even monthly payment)

[felstedrider]

It is my general view that we have seen all the falls in wholesale we are going to see for now.   It would take some massive fundamental changes for things to drop further.

Gas supplies, generation and interconnector flows have been, despite massive scare mongering been pretty healthy.   Coupled with creeping demand erosion we're seeing a pretty balanced/slightly long system.   Power prices had been in the 5p/kWh range for many many years but this Summer was trading at 50p at one point.   Yesterday the May contract went through sub-10p.   It's unlikely that prices will return to their old territory but we're left with a wholesale market 2-3 times what is used to be.   

Is it a good time to fix ?   It'll mean you're not exposed if we end up where we were last year.   The downside from current price levels feels quite low.   That BG tariff looks like a good hedge if you can jump onto another tariff for free if prices drop.

Risks stay for next Winter are sustained cold (we've had several mild Winters on the bounce), Chinese recovery causing LNG flows to head East again and the availability of the French generation fleet which can cause interconnector flows to flip.

There was a whole separate debate started by Ovo last week on green tariffs and green washing.   I have my opinions on this but it's a diversion from the core issue of energy costs.


As an aside I go on a 5 month sabbatical from Friday.   I have promised to keep in touch with the office but I will not be as up to date on market changes as I should be.

[rogerzilla]

EON are offering nothing as yet, so are presumably milking it for as long as they can until their competitors do something.

[felstedrider]

EON are offering nothing as yet, so are presumably milking it for as long as they can until their competitors do something.

I can sort of see the reticence.   You're not allowed to market a tariff that only to existing customers so offering a cheap deal means you may acquire customers you don't want along with a high up front cost due to the market stabilisation charge.

[robgul]

Interesting communication from our energy supplier, British Gas - our "ridiculously cheap" fixed deal ends on 30 April 23* - they sent a "Loyalty Jun24" offer that has no exit fees etc (so presumbaly leave when you like for another BG tarif if prices fall - but a fee if you leave BG, fair enough)

On their estimated consumption which is within a gnat's crotchet of actual the Standard Variable is £3516 and the Loyalty offer £3190 - seems worth a punt for £300+ . . .  unless there's something I'm missing on the get-out if prices fall aspect?

What's slightly worrying is that their figure quoted in the comparisons on the offer for our current tarif is  £3492 - whereas it's actually £2262 (that's gross, i.e. excluding the recent Govt contribution discount) - I've asked the question about errors, not holding my breath on a reply.


*that's on quarterly bills, pay by DD (NOT an even monthly payment)

Update -  remarkably someone from BG phoned me this morning and said :  1  The "existing calculation" was an error   2.  Yes you can leave without penalty to another BG tarif during the 14 months of the fixed  3. The new deal is supposed to be offered from 1 May and it seems the gun was jumped with the offer that appeared in my online account yesterday.

I've run the Loyalty and Cap rates/consumption through my spreadsheet and the totals are correct . ..   so I'm going to take the LoyaltyJun24 deal and make a diary note to check for any more deals every few weeks or if there are public announcemenst on the cap rates.

What's the real annoyance is the increase in standing charge old/new  Gas 14.24/29.1   Electric 29.82/53.96  - for no changes to the method of supply.

I've just realised that the 5 week holiday we have just booked from early Feb to mid-March 24 will "save" us quite a bit with the boiler down to frost protect (unlikely to fire up) and almost zero electricity with just a few lights on and off.

[rogerzilla]

As a low user, the standing charge is extremely significant for me.  About 20% of the bill in winter, and far more in summer.  Bastards.

[felstedrider]

Increasing standing charges are caused by the supplier collecting losses caused by failed suppliers and passing them back to the regulator.

I’m assuming they will drop next year as the majority of the costs sit in last year.   I’m not completely sure how long the costs are paid back over so it may take a couple of years.

[quixoticgeek]

Increasing standing charges are caused by the supplier collecting losses caused by failed suppliers and passing them back to the regulator.

I’m assuming they will drop next year as the majority of the costs sit in last year.   I’m not completely sure how long the costs are paid back over so it may take a couple of years.

Great, so we cover capitalism's failure.

FFS.

J

[felstedrider]

Increasing standing charges are caused by the supplier collecting losses caused by failed suppliers and passing them back to the regulator.

I’m assuming they will drop next year as the majority of the costs sit in last year.   I’m not completely sure how long the costs are paid back over so it may take a couple of years.

Great, so we cover capitalism's failure.

FFS.

J

The rules have been the same for donkeys. It’s just never effected the consumer before.  In previous failures Ofgem have been able to sell the customers or get someone to take them for free.  The failures last year (and the year before) were such bags of spanners that Ofgem had to pay someone to take the customers. 

The cost of Bulb’s failure has ended up way lower than expected.  Annoyingly the terms on which Octopus took the customers is not publicly available.

[rogerzilla]

In a proper free market, choosing a fly-by-night provider and building up a big credit balance would be a case of caveat emptor.  As it is, there is moral hazard because customers chased the lowest price, regardless of the povider's ability to deliver.

[felstedrider]

Ofgem are oh-so-very-keen to point out that each time the SoLR process is triggered that they are protecting consumers.   They forget to tell the consumer that they will be footing the bill.

What they are only just starting to address is preventing suppliers from failing in the first place.   The supplier application process is now taking a year.   The ability to purchase a "supplier-in-a-box" has been banned.   There are also now financial resilience tests as part of the process.   Lastly the shonky practice of putting your trades through a different entity has also been banned.

Like any form of regulation they are fixing loopholes as they crop up but it's messy.

I was informed the other day that Ofgem staff have been on strike recently.   Apparently there's 1000+ of them.

[robgul]

Spreadsheet time again with the new rates - we opted for a non-penalty fix from BG until 30 June 2024 at under the April-June 23 cap unit rates, rates are now just above - who knows, they may offer another one to leapfrog our current deal and remain below the cap?

One thing that pisses me off is the way that the "cap" is expressed as an "annual cost for the average consumer" - in my view that's pretty meaningless - the actual unit and standing charge cap rates are hidden in the depths of OFGEM's website.   Be interesting to know the proportion/numbers of consumers that actually fit the average.

[felstedrider]

Spreadsheet time again with the new rates - we opted for a non-penalty fix from BG until 30 June 2024 at under the April-June 23 cap unit rates, rates are now just above - who knows, they may offer another one to leapfrog our current deal and remain below the cap?

One thing that pisses me off is the way that the "cap" is expressed as an "annual cost for the average consumer" - in my view that's pretty meaningless - the actual unit and standing charge cap rates are hidden in the depths of OFGEM's website.   Be interesting to know the proportion/numbers of consumers that actually fit the average.

Stating the cap as £X/year is troublesome and prone to misinterpretation.  The problem is the Government think that the average consumer is too dim to work anything like this out.  I heard from a high user (think swimming pool here) who thought they were capped at £2,500 per year when they usually spend 3 times that so it’s clearly a problem.

I’m hoping the last 18 months have helped consumers to understand the market a bit more.  Should start to see a bit more competition soon.

[rafletcher]

My energy supplier (SO Energy) has just reduced my DD by £40/month. Nice of them to do so when I still have a debt with them.

[cygnet]

My Energy company (BG) thoughtfully only attributed my DD to the Electric usage, then sent me a bill, saying both leccy and gas were "on track" and "I didn't need to do anything" and "they were reducing my monthly DD by 50%"

3x Wrong.

Having seen this it's easy to understand how people slip into fuel debt, through no fault of their own.

This is all down to BT (oh, and that the call handler stated that they had not been receiving/processing gas smart meter readings since my last bill.)

I look forward to when energy companies seek new customers, rather than claiming everything is "at the cap"

[felstedrider]

The cap is currently predicted to drop below £2k* come the Autumn.

https://www.cornwall-insight.com/predictions-and-insights-into-the-default-tariff-cap/

I still think it will be a while before you see suppliers start to compete for customers again.  Too much pain in the last year and the regulator is not exactly being supportive.


* calculated for the notional average user as defined by Ofgem

[Lightning Phil]

There isn’t any such £2k cap. I do wish that wouldn’t get repeated.