Energy bills, government ‘help’ and the like

[Kim]

Suppliers going bust isn't exactly good for the consumer either...

[felstedrider]

You're arguing that it's more important to minimise any financial risk to the suppliers than it is to prevent the endless fucking over of consumers with continuous tariff churn and new customer offers?  I'm not sure if I've misunderstood?

Chicken and egg really.   Energy supply is, in general, a loss making business.   The more risks passed to the supplier, the more chance they have of folding.   Nearly 30 suppliers collapsed last Winter so more customer churn was caused by suppliers going under than there would have been in a stable market.   Remove or reduce the chance of suppliers collapsing and you reduce the disruption to consumers.

This assumes that you have an underlying belief that competition and consumer choice is a good thing.

It did take some pretty extreme market moves for this to happen so, had it not been for last Winter, the industry may never have had to have this discussion.   Ofgem have been very, very busy for the last year but it's an over reaction for the fact that they let anybody and their dog have a supply license.

[HTFB]

The unit died last week, just over 10 years from installation.  The basic story is neither the installer nor the manufacturer can tell exactly what has gone wrong.  The best the manufacturer can do is suggest I replace various PCBs from the internals, one at a time at £400+ each and if I replace them with no joy then they will give me a list of the next bits to try.  They obviously realise this is not an acceptable solution as their recommended action is to “upgrade” to a newer model, the controller board, mounting rack and wiring for which are not compatible with my current version so must all be ripped out.  Unbelievably, the replacement cost I am being quoted is actually more than a complete new installation.  Taking up this offer would swallow all the ten years of savings I made on my running costs, the Govt grant I received and more.  I can save a substantial amount (over £3k) of this extra cost by reinstalling an oil boiler and tank.  Not sure I can afford to do anything else.

That's atrocious! And disappointing, as they're supposed to be more robust than combi boilers, and to last more like 20 years than 10. Which manufacturer is it?

[JellyLegs]

The unit died last week, just over 10 years from installation.  The basic story is neither the installer nor the manufacturer can tell exactly what has gone wrong.  The best the manufacturer can do is suggest I replace various PCBs from the internals, one at a time at £400+ each and if I replace them with no joy then they will give me a list of the next bits to try.  They obviously realise this is not an acceptable solution as their recommended action is to “upgrade” to a newer model, the controller board, mounting rack and wiring for which are not compatible with my current version so must all be ripped out.  Unbelievably, the replacement cost I am being quoted is actually more than a complete new installation.  Taking up this offer would swallow all the ten years of savings I made on my running costs, the Govt grant I received and more.  I can save a substantial amount (over £3k) of this extra cost by reinstalling an oil boiler and tank.  Not sure I can afford to do anything else.

That's atrocious! And disappointing, as they're supposed to be more robust than combi boilers, and to last more like 20 years than 10. Which manufacturer is it?

I mention elsewhere in the thread that it was Mitsubishi.

In other news, I have just bitten the bullet and told a local installer to rip out the heat pump, associated pipe work, control system and sundries and then supply and fit a new oil tank, lots of new pipework and boiler plus Hive controls etc.  That still comes in at over £6k but that’s £4k less than the air source heat pump people wanted to replace the existing unit.  I dislike myself for the environmental damage that implies but I can’t really afford the extra £4k and I certainly couldn’t afford the extra £10k plus if another heat pump failed just out of guarantee.

[andyoxon]

Views on energy account balance; credit / debit levels at diff times of year?  Currently based on our recommended monthly £DD payment, we (they) have 2.25x our monthly DD £ as credit, this having just reduced due to recent meter reading.  Apparently teh Lewis says this is about right, so will probably leave it.   Supposedly 'energy providers have ~ £8 billion pounds of consumer money as balance credit'...

[rafletcher]

We're about 1.3x DD in credit at the moment, which I find acceptable. We are allowed to owe them money later in winter, they don't insist on always having a positice balance.

[Mrs Pingu]

I have a stupid amount of money in credit (looks, it's DDx9), I should probably ask for some of it back....

[robgul]

When we moved to BG (from Avro, one of the more spectacular failures - we inherited them when we bought the house in early 2020) - we were offered a quarterly "pay-as-you-go" DD deal - i.e. we pay a quarterly DD just for what we've used.

We are obviously fortunate to be able to do that rather than needing to spread even monthly payments - and at least we aren't financing an energy company.

[Afasoas]

Did have about DD * 2.5 in credit but they've just refunded it all.
Got about that stashed into a savings account to cover any winter excess.

[rogerzilla]

Winter excess?  Like chocolate, Bailey's and pudding?

[Afasoas]

Winter excess?  Like chocolate, Bailey's and pudding?

Having the heating on is a bit of a luxury

[cygnet]

I'm in debit, because BG fucked up their billing so badly they actually wanted to reduce my monthly payments.

I've worked out a payment that is a) affordable and b) should see me neutral in about a year's time. Their calculations are demonstrably shit so I shall be ignoring those.

[felstedrider]

Ours is about right.  Mum was in debit with BG after they were collecting too little for ages following the acquisition of her old supplier.  I can’t move the payment down as yet but it should be ok in the Spring.  It doesn’t help that her friends are all seeing reductions.

Ofgem have cottoned on that most suppliers use customer deposits to fund their businesses.  There are proposals for ring fencing but the suppliers are against it.  It’s very hard to raise debt for an energy supplier for pretty obvious reasons.  It will increase bills at current interest rates.  I think Ovo still pay customers interest.

Latest forecast for variable rates is that they will go up 1st Jan.  Wholesale prices have bubbled up a bit recently but supply remains good overall.

[Keef66]

We ended up owing EonNext about £500 just because their algorithm had automatically reduced our monthly payments twice, and I CBA to check.  Then all of a sudden it suggested trebling our monthly payments at which point I suddenly became interested and a massive Excel sheet ensued. Negotiated a more reasonable repayment plan which should see us break even over 12 months.

Wonder if it's possible to go back to paying an actual usage monthly bill by DD and avoid all this nonsense??  We're not on a tight budget so could easily cope with the variable outgoings

[Paul H]

Views on energy account balance; credit / debit levels at diff times of year?  Currently based on our recommended monthly £DD payment, we (they) have 2.25x our monthly DD £ as credit, this having just reduced due to recent meter reading. 

I'm about 4X which feels about right for me, I pretty much double my consumption in the winter, elec only. Hopefully I've enough credit to cover that, I'll look again in April and adjust accordingly.  Despite being in credit, I get regular suggestions from BP to increase the DD by 50% based on estimated usage, I politely decline, I'd rather base it on history than estimates.

[felstedrider]

New cap published today.

This from Ofgem, not as tucked away as it usually is :-

From 1 January 2024 Price Cap average direct debit unit rates for energy;

ELECTRICITY
Unit rate: 28.62p per kWh
Standing charge: 53.35p per day

GAS
Unit rate: 7.42p per kWh
Standing charge: 29.60p per day

These are caps on unit rates plus the standing charge (not a cap on total bills)

[rogerzilla]

At least they haven't increased the exorbitant standing charge any more.  Are we still paying for Bulb?  A back of the envelope calculation suggests the increase in standing charge since Bulb went titsup has raked in an extra £5bn on electricity alone.

[felstedrider]

At least they haven't increased the exorbitant standing charge any more.  Are we still paying for Bulb?  A back of the envelope calculation suggests the increase in standing charge since Bulb went titsup has raked in an extra £5bn on electricity alone.

I suspect some of the supplier failure costs are still being recouped, but there's not been one for a while.   To be fair, there aren't many left.   The exact terms of the Octopus/Bulb deal have not been disclosed but I suspect that there was a lot of Government funding negotiated as they were the last player left who could or were willing to move that many customers.

Ofgem have announced a review of standing charges in the last couple of weeks.   It seems that a lot of grid investment costs are making their way into the standing charge as well.   Moving costs into the variable rate would distribute the costs more fairly but we'll need to watch this space.

https://www.bbc.co.uk/news/business-67431758

[matthew]

Ofgem have announced a review of standing charges in the last couple of weeks.   It seems that a lot of grid investment costs are making their way into the standing charge as well.   Moving costs into the variable rate would distribute the costs more fairly but we'll need to watch this space.

https://www.bbc.co.uk/news/business-67431758

I may be wrong, but I thought the standing charge was meant to pay for the infrastructure, the bit we need whether it is used or not and the variable charge was supposed to pay for the generation.

[felstedrider]

Ofgem have announced a review of standing charges in the last couple of weeks.   It seems that a lot of grid investment costs are making their way into the standing charge as well.   Moving costs into the variable rate would distribute the costs more fairly but we'll need to watch this space.

https://www.bbc.co.uk/news/business-67431758

I may be wrong, but I thought the standing charge was meant to pay for the infrastructure, the bit we need whether it is used or not and the variable charge was supposed to pay for the generation.

Oh yeah.   It's this exactly.   The suppliers pass on the charges they get so if there's standing distribution charges then these will be passed to the end user.   For Ofgem to change the way that customers are charged they will need to change the way that industry charges the suppliers.   

The suppliers could bundle the whole cost into the unit rate, and this was used as a sales strategy for a while, but :-

1 - You run the risk of the customer using less and making a loss.
2 - The Price Cap methodology doesn't currently allow for this.

[rogerzilla]

If you're a low user, the standing charge is horrendous.  It's 27% of my bill on an annual basis (I pay £95/month).  I imagine someone in a small energy-efficient flat could be paying 50%.

[rogerzilla]

Hive tells me that the indoor temperature fell from 19.3 deg C to 16.1 deg C between 0000 and 0600, when it was between -1 and 1 outside.  That's pretty average for a UK home.  But we are the worst in Europe.  It wouldn't be much over a 1 degree drop in Germany.  However, Germany is colder in winter so it's always been more important to insulate well.  Also, their housing stock is much newer, partly because of us   

[Paul H]

If you're a low user, the standing charge is horrendous.  It's 27% of my bill on an annual basis (I pay £95/month).  I imagine someone in a small energy-efficient flat could be paying 50%.

The standing charge in my electric only small flat is around 25% of my winter bill and 40%+ for the other nine months.  It is what it is, but in percentage terms it has hit the lower users harder.  A couple of years ago I was paying £8 a month more for the entire bill than I'm currently paying for the standing charge.

[phantasmagoriana]

My 2 year fix is coming to an end.   What's the current wisdom on fixed vs. variable?

Current rates:

Electricity
Unit rate 25.02p per Kilowatt hour
Standing charge 36.11p per day

Gas
6.33p per Kilowatt hour
Standing charge 24.88p per day

The standard variable rate I'll move to if I do nothing (I'm with Ovo) is:

Electricity
Unit rate 26.89p/kWh
Standing charge 61.67p/day

Gas
Unit rate 6.85p/kWh
Standing charge 29.11p/day

Fixed options are fractionally higher. But I'm confused - the current price cap is 53.37p for electricity, so how can they charge 61.67p?

Whatever I do, I'm fairly sure I'm going to see a big increase in bills, but the electricity standing charge seems huge...

[Mrs Pingu]

Because the price cap SC you quote is an average and you're in Scotland, I suspect
See here for regional rates
https://www.moneysavingexpert.com/utilities/what-are-the-price-cap-unit-rates-/#unitrates

That page quotes the average price cap rates and the regional rates for now and also from January.