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

[felstedrider]

Just been looking at the ‘rebate’ on energy bills.

Basically, it’s a loan.  Everyone will get a credit of £200 in October.  This will then be collected back over the following 5 years.  This smooths increased costs out over time rather than gifting anyone anything.

The Chancellor is gambling that prices will fall, if they don't or continue rising, we'll all have a bigger increase to face next year when you have that to pay that plus £40.  It's like a payday loan, if you can't afford it this year, you'll be less likely to afford an increased amount next. The money would have been better targeted at those in need.

Based on the current forward wholesale market he’s probably right.  As an example Winter 22 is 19.5p and Winter 24 is 12p.  This is probably a temporary large uptick, although a return to previous prices is unlikely.

[Polar Bear]

So, if folk swap suppliers either by necessity or whim what happens to the loan?  Also, isn't the loan less favourable to folk who find themselves on standard tariffs due to being transferred as it is to folk who were fortunate enough to be in the position to get a cheaper deal? 

[felstedrider]

So, if folk swap suppliers either by necessity or whim what happens to the loan?  Also, isn't the loan less favourable to folk who find themselves on standard tariffs due to being transferred as it is to folk who were fortunate enough to be in the position to get a cheaper deal?

Who said energy policy was well thought out ?

[Mr Larrington]

(Googles)

Apparently we do have a Minister of State for Business, Energy and Clean Growth, viz. Greg “Who He?” Hands.  Anyone seen him on the electric-type television recently, or indeed at all?

[Mrs Pingu]

Next year? What about October when they can change the cap again?

[Mrs Pingu]

(Googles)

Apparently we do have a Minister of State for Business, Energy and Clean Growth, viz. Greg “Who He?” Hands.  Anyone seen him on the electric-type television recently, or indeed at all?

Only defending our inglorious leader.

[Paul H]

So, if folk swap suppliers either by necessity or whim what happens to the loan? 

For the consumer? They have the ability to transfer credit so I doubt transferring the debt will be an issue.  Except I don't think it's being treated as a personal debt, the money is going to the suppliers, so I expect everyone's bill will go down £200 this year and up £40 @ year for the next five.

[perpetual dan]

A blanket discount and then price hike seems designed to work against anyone young enough to get their first energy bill in the next few years. Though they mostly wouldn’t vote Tory. Or couple separating, where a couple might get one discount and then two repayments as individuals.

[Kim]

A blanket discount and then price hike seems designed to work against anyone young enough to get their first energy bill in the next few years. Though they mostly wouldn’t vote Tory. Or couple separating, where a couple might get one discount and then two repayments as individuals.

The flip side of that is that the number of electricity supplies is only going to go up as new houses are built.  Which means the treasury is quids-in.

[Mr Larrington]

(Googles)

Apparently we do have a Minister of State for Business, Energy and Clean Growth, viz. Greg “Who He?” Hands.  Anyone seen him on the electric-type television recently, or indeed at all?

Only defending our inglorious leader.

Curious behaviour from one who supported the leadership bid of Jeremy Rhyming-Slang

[felstedrider]

A blanket discount and then price hike seems designed to work against anyone young enough to get their first energy bill in the next few years. Though they mostly wouldn’t vote Tory. Or couple separating, where a couple might get one discount and then two repayments as individuals.

It currently looks like the cap will come down in October.  In theory, the increase due to the loan repayment will be more than offset by the drop in tariff.  Of course a lot can change in the next year.

[perpetual dan]

A blanket discount and then price hike seems designed to work against anyone young enough to get their first energy bill in the next few years. Though they mostly wouldn’t vote Tory. Or couple separating, where a couple might get one discount and then two repayments as individuals.

It currently looks like the cap will come down in October.  In theory, the increase due to the loan repayment will be more than offset by the drop in tariff.  Of course a lot can change in the next year.

Presumably the drop in the bottom line on the bill would be even larger without a loan repayment though. Or have I misunderstood the way the loan works?

I get that for many people some measure to take the pressure off when bills are at their highest will be a life saver. I was more responding to the idea that it would be a flat +£40 all round after. For some people that will be far from fair. Also, what Kim said.

I suspect this one of those hastily thought up announcements that hasn't actually been designed to really help people in general.

[felstedrider]

A blanket discount and then price hike seems designed to work against anyone young enough to get their first energy bill in the next few years. Though they mostly wouldn’t vote Tory. Or couple separating, where a couple might get one discount and then two repayments as individuals.

It currently looks like the cap will come down in October.  In theory, the increase due to the loan repayment will be more than offset by the drop in tariff.  Of course a lot can change in the next year.

Presumably the drop in the bottom line on the bill would be even larger without a loan repayment though. Or have I misunderstood the way the loan works?

I get that for many people some measure to take the pressure off when bills are at their highest will be a life saver. I was more responding to the idea that it would be a flat +£40 all round after. For some people that will be far from fair. Also, what Kim said.

I suspect this one of those hastily thought up announcements that hasn't actually been designed to really help people in general.

I’ll caveat this by saying that we, as an industry, don’t really know yet.

The cap has just risen by the equivalent of £700 pa.   If it drops back to the original level next year then customers will see a £660 saving instead.  Basically as you describe.  I would say the £200 isn’t enough but we are going into Summer where people use a lot less energy.  They will then get a £200 credit going into the higher use period of the year and the cap may be lower.  It smooths the spend out rather than gifting anything.

Ofgem have said they are planning to review the cap 3-monthly rather than 6-monthly.   This would fix an element of the issues that have been found recently.

[barakta]

Except a 3 monthly review of the cap screws over people on fixed incomes more as they have more uncertainty and no opportunity for that to feed into things like benefit allowances or minimum wage or other government assistance...

[felstedrider]

Except a 3 monthly review of the cap screws over people on fixed incomes more as they have more uncertainty and no opportunity for that to feed into things like benefit allowances or minimum wage or other government assistance...

The thing with the cap is that no-one should ever really have to pay it.  We are in the really daft position until the end of March where the cap is cheaper than anyone can supply energy.  From 1st April the cap goes up and there should be some competitive deals out there.  Once you’ve signed a one year fix you know your costs.

[ian]

Just been looking at the ‘rebate’ on energy bills.

Basically, it’s a loan.  Everyone will get a credit of £200 in October.  This will then be collected back over the following 5 years.  This smooths increased costs out over time rather than gifting anyone anything.  I’m on a fixed rate as there was a decent renewal offer that removed any exposure to the cap change, but I get the credit as well.  I would have expected it to only be paid to customers on SVR.  I’m not complaining but any payment is not designed to help people like me.  Probably policy implemented in a very short space of time.

The French have dealt with this very differently, forcing EDF to supply customers at a profitable but heavily discounted rate.

Technically it's a gift to the energy supply companies, dressed up as a loan to consumers. Since it's not optional, we have all basically all given them an extra £200 each. They don't have to pay this back, we do.

[felstedrider]

Just been looking at the ‘rebate’ on energy bills.

Basically, it’s a loan.  Everyone will get a credit of £200 in October.  This will then be collected back over the following 5 years.  This smooths increased costs out over time rather than gifting anyone anything.  I’m on a fixed rate as there was a decent renewal offer that removed any exposure to the cap change, but I get the credit as well.  I would have expected it to only be paid to customers on SVR.  I’m not complaining but any payment is not designed to help people like me.  Probably policy implemented in a very short space of time.

The French have dealt with this very differently, forcing EDF to supply customers at a profitable but heavily discounted rate.

Technically it's a gift to the energy supply companies, dressed up as a loan to consumers. Since it's not optional, we have all basically all given them an extra £200 each. They don't have to pay this back, we do.

Govt gives energy supplier £200
supplier gives consumer £200

Consumer pays back 5 * £40 to supplier
supplier pays back to Govt

I see no gifts here ?

[ian]

The suppliers are never going to pay £200 back though – and even if they were, it's a costly administrative nightmare for a modest sum of money.

[felstedrider]

The suppliers are never going to pay £200 back though – and even if they were, it's a costly administrative nightmare for a modest sum of money.

Have you got a crystal ball ?   as that's a bit of a leap......

[ian]

Well, true, past performance is no guarantee of future performance.

I'd be interested to know what guarantees are in place to ensure the money is paid back, and how much of that £200/person is actually returned to the exchequer, presumably adjusted for inflation and to include interest.

I do know that effectively, energy suppliers now have £200/person they didn't have before, so charitably it's a very cheap, subsidized loan. That they're temporarily transferring the cash to their customers is a bit of a feint, since the customers can only give them the money back.

[felstedrider]

Well, true, past performance is no guarantee of future performance.

I'd be interested to know what guarantees are in place to ensure the money is paid back, and how much of that £200/person is actually returned to the exchequer, presumably adjusted for inflation and to include interest.

I do know that effectively, energy suppliers now have £200/person they didn't have before, so charitably it's a very cheap, subsidized loan. That they're temporarily transferring the cash to their customers is a bit of a feint, since the customers can only give them the money back.

Policy was announced last Thursday.   As I mentioned upthread there's no detail.

Anyway I am getting dragged into all this again so will drop out.   I have had to put up with a shitload of misinformation from both sides of the political spectrum over the weekend and I just don't have the energy.

[ian]

I'm not arguing with you – I'm making the general point that as policy goes, this seems poorly thought out and ultimately unhelpful to the people who need the help (and I expect a sleight of hand). You don't need to defend government policy, my points were rhetorical.

[mrcharly-YHT]

Well, true, past performance is no guarantee of future performance.

I'd be interested to know what guarantees are in place to ensure the money is paid back, and how much of that £200/person is actually returned to the exchequer, presumably adjusted for inflation and to include interest.

I do know that effectively, energy suppliers now have £200/person they didn't have before, so charitably it's a very cheap, subsidized loan. That they're temporarily transferring the cash to their customers is a bit of a feint, since the customers can only give them the money back.

Policy was announced last Thursday.   As I mentioned upthread there's no detail.

Anyway I am getting dragged into all this again so will drop out.   I have had to put up with a shitload of misinformation from both sides of the political spectrum over the weekend and I just don't have the energy.

Your input into this whole discussion is greatly appreciated and has helped me understand just wtf is going on.

[hubner]

I'm a light user and standing charges are horrific as a percentage of the bill - 1/4 for gas.  They increased the daily charge from 7p to 28p on the electricity side, too.  WTAF?

I think light users get ripped off by standing charges.

They reduce the unit price to comply with a price cap but jack up the standing charges.

http://www.bbc.co.uk/news/business-38891010

Energy prepay cap to save customers £80, announces Ofgem

Four million customers on prepayment energy meters are expected to save around £80 a year after a price cap was announced by energy regulator Ofgem.

The temporary price cap, which comes into effect in April, was one of the measures recommended by the Competition and Market Authority after its two-year investigation of the energy market.

The levels of the cap vary for gas and electricity by meter type and region.

It will be updated every six months and is expected to stay until 2020.

OK; current Npower electricity prepayment prices:
standing charge: 11.5p per day or £42 per year
unit rate: 16.66p per kWh

One year low usage: 870 units + standing charge = £187

New price with the cap:
standing charge: 28.76p per day or £105 per year
unit rate: 13.33p per kWh

One year low usage: 870 units + standing charge = £221

That's an increase of £34; just over 18%!

And the standing charge is going up two and a half times. I think standing charges are a massive con.

Npowers gives 2 reasons for the price increase:

1, the prepayment price cap...which limits ...the cost of electricity and gas you'll pay
2, to bring prepayment prices into line with other electricity tariffs within the Cap limits

I'm not sure what the second means, apart from they have to reduce the the unit rate because of the cap but they will jack up the standing charge to keep the overall price the same or more.

[felstedrider]

Fact check.  The standing charge is included in the price cap calculation.


https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-if-energy-price-cap-affects-you