Peoples Energy: any experiences and/or knowledge of this supplier please?

[felstedrider]

I see we're subsidising Bulb to the tune of £1000 per customer.   Surely a market-led government should just let it fail and make the customers sign up to whatever tariff they can find elsewhere?  But we always socialise losses after the fat cats have taken their profits and run.

Basically BEIS/Ofgem went round the bigger suppliers asking if they could take on 1.7m customers through SoLR, the only mechanism they had, and were firmly told to do one.   Ofgem appointed insolvency advisors about a month ago so you could see this in the planning.   The losses will be collected in the same way as other SoLR costs and added on to consumer bills as a levy.   

Let's be fair though, no one at Bulb was a fat cat or has taken any profits.   They have been loss making from day one.

[Polar Bear]

Will Bulb customers see their energy prices rise immediately by significant amounts just as those of us who have been forced into a SoLR's hands have?

Seems unfortunate but entirely warranted to me.

[felstedrider]

Will Bulb customers see their energy prices rise immediately by significant amounts just as those of us who have been forced into a SoLR's hands have?

Seems unfortunate but entirely warranted to me.

They are priced at the cap already.   All of Bulb's customers were on their standard variable rate which they had moved up to the cap to protect themselves as much as they could.

The customers aren't incentivised to leave and no-one will buy the book.   The Govt is, essentially, now exposed to its own energy policy.

[hatler]

Will Bulb customers see their energy prices rise immediately by significant amounts just as those of us who have been forced into a SoLR's hands have?

Seems unfortunate but entirely warranted to me.

They are priced at the cap already.   All of Bulb's customers were on their standard variable rate which they had moved up to the cap to protect themselves as much as they could.

The customers aren't incentivised to leave and no-one will buy the book.   The Govt is, essentially, now exposed to its own energy policy.

And by 'The Govt', you of course mean us.

[felstedrider]

Will Bulb customers see their energy prices rise immediately by significant amounts just as those of us who have been forced into a SoLR's hands have?

Seems unfortunate but entirely warranted to me.

They are priced at the cap already.   All of Bulb's customers were on their standard variable rate which they had moved up to the cap to protect themselves as much as they could.

The customers aren't incentivised to leave and no-one will buy the book.   The Govt is, essentially, now exposed to its own energy policy.

And by 'The Govt', you of course mean us.

Yeah.   Costs will be mutualised and collected back via an industry levy.

[Jaded]

I see we're subsidising Bulb to the tune of £1000 per customer.   Surely a market-led government should just let it fail and make the customers sign up to whatever tariff they can find elsewhere?  But we always socialise losses after the fat cats have taken their profits and run.

It is OK, the BBC is reporting that the £1,000 per customer is a loan…

[Polar Bear]

The problem with market lead economies is that they crash, suffer recessions and depressions.  Profit is a short term motive otherwise known as greed.

Looks like we need to renationalise every supplier that has already and is about to fail.  Of course, this bunch of self-serving, fascist, greedy idealists will never want to tread that road willingly.

Just imagine how big the "loan" will need to if BG, Eon etc. fail...

[grams]

Let's be fair though, no one at Bulb was a fat cat or has taken any profits.   They have been loss making from day one.

They didn't take a salary ?!

[felstedrider]

Let's be fair though, no one at Bulb was a fat cat or has taken any profits.   They have been loss making from day one.

They didn't take a salary ?!

Accounts to 2020 :-

https://find-and-update.company-information.service.gov.uk/company/08469555/filing-history

'The directors did not receive any remuneration from the company'

So then you have to go and look at the parent company :-

https://find-and-update.company-information.service.gov.uk/company/09249540/filing-history

Total salary bill of £20m with 500 employees.   Average salary of £40k with the entire workforce in the City.   Prob not unreasonable.   In these accounts you see the note 'the 2 highest paid directors were paid £113k'.   £1.5bn turnover company.   Probably not an unreasonable payment. 

[felstedrider]

Cost of Supplier of Last Resort failures do far is £1.8bn.   Ofgem have just approved that this is added to consumer bills from the 1st April.   This comes before the price cap review so can be included in suppliers tariffs.   Wholesale prices for Summer 22 are now 5 times where they were a year ago.   This is going to be pretty disastrous for the industry and push a lot more households into fuel poverty.

Please note this cost does not include the cost of Bulb's failure which will be recovered by alternate means as yet to be disclosed.

[ian]

It's all worked really well then.

[hatler]

And I'm sure the infrastructure is now all top-notch stuff, after all these years of super efficient private ownership.

[rogerzilla]

So about £70 each?  How is that fair?  Pick a cheap crap supplier, supplier goes bust, everyone else, who was probably paying more anyway, bails you out.

It's as bad as the Pension Protection Fund, where well-run schemes bail out those run by shysters.

[felstedrider]

So about £70 each?  How is that fair?  Pick a cheap crap supplier, supplier goes bust, everyone else, who was probably paying more anyway, bails you out.

It's as bad as the Pension Protection Fund, where well-run schemes bail out those run by shysters.

Fag packet.   There's 25million domestic meters in the UK (looks like you used that) but this accounts for less than 50% of national consumption.   So more like £35 each as business/industrial covers the rest of the cost.   If the Bulb cost is also smeared in, and it probably will be, then more like your £70.

There is no comeback for failing.   I've never seen anyone be disqualified from re-entering the sector after a failure.

Ofgem are still finalising the way they will increase scrutiny on new entrants but it looks like they will follow FCA style financial tests, but that doesn't cover hedging/risk management or offering loss leading tariffs.   I was talking to a someone about this yesterday and they have been asked to wait an extra 3 months while their application is considered.   This is probably quite helpful with the existing conditions but annoying if you have written a business plan and raised capital.

[felstedrider]

And I'm sure the infrastructure is now all top-notch stuff, after all these years of super efficient private ownership.

Except this is the supply sector and none of these suppliers owned any generation or transmission assets.   Every supplier pays the same amount to the wires/pipelines businesses to maintain the network and buys power and gas from generators and wholesalers.   Now how well that money is spent is a whole different kettle of fish.

I think I saw something recently that one of the reasons for the recent power failures in the North and Scotland were down to poorly maintained networks, but I could be wrong.

[FifeingEejit]

Doesn't matter how well maintained your network is, if a GBFO tree lands on your infrastructure it's failing.
In some cases the >100mph winds were enough to remove the cables and brackets from the poles/towers, snap poles in half etc. Which may be due to maintenance, but could also be due to maximum loading being exceeded from anything including the way the wires were moving between poles or due to other poles being broken by the wind and increasing the loading on the rest etc.

The pictures I've seen from guy working for SSE in Furrybootsshur after it is 

[Pingu]

Isn't part of maintenance stopping nearby trees getting too GBFO?

[grams]

So about £70 each?  How is that fair?  Pick a cheap crap supplier, supplier goes bust, everyone else, who was probably paying more anyway, bails you out.

If you believe in capitalism all of those shysters were putting useful downward pricing pressure on the other suppliers. Their unsustainable prices were making everyone else offer unsustainable prices. You should be thanking them.

[Polar Bear]

All that happens when a capitalist trading scheme goes pop is that the customer ends up with little choice and higher prices.  At the 3ndnofnthe day the really big players on the long game just clean up both the customers and the longer term profits.

I was discussing the energy supply issues with a few friends recently.  It's difficult to remember when prices and supply were so volatile under the nationalised system*.  Seems to me that the only honest justification for privatisation is profit.

* awaits flood of examples showing otherwise.

[L CC]

<snip>Seems to me that the only honest justification for privatisation is profit.</snip>

Well duh.

[felstedrider]

I was discussing the energy supply issues with a few friends recently.  It's difficult to remember when prices and supply were so volatile under the nationalised system*.  Seems to me that the only honest justification for privatisation is profit.

* awaits flood of examples showing otherwise.

I probably wouldn't dispute this.   In reality pre-privatisation the power market was oversupplied.   Grid had loads of spare margin and they liked it that way.   In 2001 we moved from a centrally dispatched pool based system to a dispatch-as-paid system with OTC trading (NETA).  Now when you introduce an OTC market to an over supplied system the inevitable happened and prices dumped to the point where the nuke fleet had to be bailed out by the Govt.   For the few years after that consumer bills were the lowest they had been and suppliers were able to make profits.   Everyone happy.   

We are now at the other end of the scale.  Any money to be made in the sector has disappeared.   If you take Centrica as an example their share price has dumped and they have stopped paying dividends.   They will be loss making at the moment with the price cap where it is.   

It is fair to say we have some very extreme events at the moment causing prices to be where they are.   The gas things is unavoidable as we are reliant on imports, are at the end of the supply chain, and everyone else wants it as well.   The electricity issues are exacerbated by being more reliant on wind and there hasn't been any for a week but prices in France have roofed so our interconnectors are flowing in the opposite direction to usual.   I'm not sure this could have been avoided with more investment but maybe allowing less plants to close would have helped, but the majority have been coal-fired and they had to come off for emissions reasons.

[Cudzoziemiec]

<snip>Seems to me that the only honest justification for privatisation is profit.</snip>

Well duh.

Yebut profit is the justification for almost everything. It's profitable therefore it's good.

[FifeingEejit]

Isn't part of maintenance stopping nearby trees getting too GBFO?

Not their land to manage.
The fire breaks are convenient places to run power lines so they'll have either wayleave or easements for gaining access and having the kit there but nothing else.

See also when they put it under roads...

[Polar Bear]

<snip>Seems to me that the only honest justification for privatisation is profit.</snip>

Well duh.

So you mean all the bullshit about competition bringing innovation, choice and lower prices due to dynamic market-based competition is a load of fertiliser derived from a large male bovine?  I am shocked. 

Or maybe not ...

[hatler]

Bleed the inherited resources dry, maximise short term profit and enjoy the ride.

And hey, why not. When it all goes tits up the government will bail our customers out and we walk away from a bankrupt business, no skin off my nose.