Energy Prices (Strictly NO referrals!)

[Deleted User 234324]

These constantly changing price predictions for the winter are a clear indication that privatisation and a globalisation do not work for the energy market.

I wonder how many countries are thinking about bringing it back into their own hands now rather than rely on importing energy.

 

[Mercenary Keyboard Warrior]

had one of those kettles, broke super quick, should be banned imo.

ofc the cheapest kettle is no kettle. nobody actually needs hot drinks.

I said the same elsewhere, we in fact had 2, both broke relatively quickly

 

[the shadow]

Sauce pan vs Kettle again

 

[ubersonic]

Ofgem changing the price review to 3 months and tweaking the formula both of which make things much more expensive for the consumer. You have to question what the hell they are doing right now.

I believe they are trying to avoid a repeat of last year, where multiple energy companies went bankrupt because the prices rose so much/fast that the caps meant they were selling at a loss.

 

[Deleted User 234324]

I don't quite understand why we had to foot the bill for it.

They were private business's, if a shop goes out of business, it doesn't cost us anything, if a bus station went out of business, it wouldn't cost us anything. Why should these privately run energy business's cost us.

 

[Haggisman]

It’s challenging to keep up with the price cap update in October - Ofgem have tweaked the calculation, which makes it more expensive !!

The latest is :
- Gas prices to rise 94%
- Electricity prices to rise 71%

Meaning the average bill is expected to be £3,687 in October, £4,400 from January and £4,700 from April

Jesus...

At this rate its going to be cheaper to heat your home with a BTC miner than conventional heating!

I don't quite understand why we had to foot the bill for it.

They were private business's, if a shop goes out of business, it doesn't cost us anything, if a bus station went out of business, it wouldn't cost us anything. Why should these privately run energy business's cost us.

The reason they failed is because the cap forced them to sell their product at a loss.

It's not so much us footing the bill for it, as trying to prevent more of them going under.

What's the better outcome, all energy suppliers go bust and no-one has any energy, or we have to pay more realistic prices?

 

[darael]

Anyone wfh https://www.hotukdeals.com/deals/br...penser-3kw-fast-boil-ps3199-at-amazon-3977736

I had one of these and the novelty quickly wore off as cups of tea took longer to brew and were barely warm after adding milk. In summer you can just about get with it, but in colder weather I found myself preheating a cup by boiling two cups of water - which defeats the purpose, so I went back to a normal kettle.

It’s challenging to keep up with the price cap update in October - Ofgem have tweaked the calculation, which makes it more expensive !!

The latest is :
- Gas prices to rise 94%
- Electricity prices to rise 71%

Meaning the average bill is expected to be £3,687 in October, £4,400 from January and £4,700 from April

People need to prepare for their bill to double, because that's exactly the direction it's going.

 

[Nemiyen]

I don't quite understand why we had to foot the bill for it.

They were private business's, if a shop goes out of business, it doesn't cost us anything, if a bus station went out of business, it wouldn't cost us anything. Why should these privately run energy business's cost us.

This was exactly may thoughts on it as well. My guess is part of that standing charge goes to grease the company taking on those new customers.

They can claim they're making a loss by taking them on, then release record results next year. Win win.

 

[Doobedoo]

What's the better outcome, all energy suppliers go bust and no-one has any energy, or we have to pay more realistic prices?

Not all energy companies have gone bust though. They would’ve owned money to the energy producers it shouldn’t have nothing to do with the tax payers.

 

[Deleted User 234324]

Jesus...

At this rate its going to be cheaper to heat your home with a BTC miner than conventional heating!



The reason they failed is because the cap forced them to sell their product at a loss.

It's not so much us footing the bill for it, as trying to prevent more of them going under.

What's the better outcome, all energy suppliers go bust and no-one has any energy, or we have to pay more realistic prices?

realistic for who, over a 3rd of the country won't be able to afford it come October, can completely forget about any form of heating for millions of people which will ultimately lead to thousands of unnecessary and completely avoidable deaths.

 

[Haggisman]

realistic for who, over a 3rd of the country won't be able to afford it come October, can completely forget about any form of heating for millions of people which will ultimately lead to thousands of unnecessary and completely avoidable deaths.

Realistic in terms of what the product actually costs.

Not sure why you're throwing the "avoidable deaths" line in there except as an unnecessary appeal to emotion - that energy has to be paid for somehow and by someone. So we could force suppliers to continue to sell at a substantial loss, they go bust, people lose their jobs and nobody can buy energy because there is nobody left to buy from, or, the government bails the suppliers out and we all pay for it through taxes, or, people get millions in handouts to pay for it and we all pay for it through taxes. There is no magic solution where we somehow get cheap energy without paying for it.

Not all energy companies have gone bust though. They would’ve owned money to the energy producers it shouldn’t have nothing to do with the tax payers.

No they haven't, the bigger companies who either had enough in cash reserves which allowed them to absorb the losses, or who bought enough energy far enough in advance that the rises didn't affect them YET have not gone bust YET, but it doesn't take a genius to understand what will happen to companies who are forced to sell their product at a loss long term - it's just not sustainable. Eventually either they'll run out of reserve money, or the energy bought in advance will run out and they'll be forced to buy more at current prices.

Curious if there is any legislation to prevent an energy company from just deciding to wind up? If the market is artificially untenable, then why would you want to keep operating in it?

 

[Doobedoo]

If a business buys stock from a supply chain, if they sell the stock at a loss and go bankrupt it has nothing to do with the government or us as consumers. It’s down to the supply chain to pursue the business for lack of payment and either recover costs or write it of as a loss.

 

[danlightbulb]

The reason they failed is because the cap forced them to sell their product at a loss.

It's not so much us footing the bill for it, as trying to prevent more of them going under.

I dont think this is quite correct.

The newer energy retailers operated very tight margins if any margins, so yes they are susceptible to price rises. However the reason we're all paying for these companies going bust is that the credit balances of customers are protected, and have to be transferred to the new provider. But the retailers who went bust didn't ringfence balances, weak regulation meant they didn't need to hold much if any capital at all. So when these companies went bust (likely paying dividends to themselves or shell companies using customer credit balances in the process), the rest of us had to stump up to refund the credit balances back to customers because that money had vanished.

It is really weak regulation that has caused this.

 

[Deleted User 234324]

Renewables are cheap energy, its their entire purpose. The problem is some genius decided to link their price to that of wholesale gas.

Simply put the current private/global model for utility supplies does not work. Each country should be self sufficient.

 

[Haggisman]

If a business buys stock from a supply chain, if they sell the stock at a loss and go bankrupt it has nothing to do with the government or us as consumers. It’s down to the supply chain to pursue the business for lack of payment and either recover costs or write it of as a loss.

Correct. And if a business is unable to procure stock because it doesn't have the necessary funds, then how can it sell that stock to its customers?

If a business goes bankrupt because it sold all its stock at a loss, then how can it sell stock to customers?

Where are you proposing to buy your energy when all the suppliers have gone bankrupt because they've been forced to sell at a loss?

 

[Mercenary Keyboard Warrior]

Not all energy companies have gone bust though. They would’ve owned money to the energy producers it shouldn’t have nothing to do with the tax payers.

Normally they pay for energy up front

And even if they owned the producers money, the price they were paying was higher than they were being forced to sell it for

It was totally dumb and the cap should have been canned pretty much immediately the problem was identified.

 

[Doobedoo]

Correct. And if a business is unable to procure stock because it doesn't have the necessary funds, then how can it sell that stock to its customers?

If a business goes bankrupt because it sold all its stock at a loss, then how can it sell stock to customers?

Where are you proposing to buy your energy when all the suppliers have gone bankrupt because they've been forced to sell at a loss?

Ok no problem they go bust and the customers move to the other suppliers and are supplied at current market rates. Still no need to increase the SC and effectively use it as a stealth tax.

 

[Doobedoo]

Normally they pay for energy up front

And even if they owned the producers money, the price they were paying was higher than they were being forced to sell it for

It was totally dumb and the cap should have been canned pretty much immediately the problem was identified.

Not denying this but why do we have to pay this bill? We the consumers have paid what we owe as usual. We aren’t the ones at any part of the supply chain, that are either mismanaging or reaping huge profits.

 

[Mercenary Keyboard Warrior]

I dont think this is quite correct.

The newer energy retailers operated very tight margins if any margins, so yes they are susceptible to price rises. However the reason we're all paying for these companies going bust is that the credit balances of customers are protected, and have to be transferred to the new provider. But the retailers who went bust didn't ringfence balances, weak regulation meant they didn't need to hold much if any capital at all. So when these companies went bust (likely paying dividends to themselves or shell companies using customer credit balances in the process), the rest of us had to stump up to refund the credit balances back to customers because that money had vanished.

It is really weak regulation that has caused this.

The regulation was weak in order to promote change and competition.
Simply, the new businesses were different models and some had the chance and "luck" to transition into decent companies, eg Octopus.
Businesses have always failed and always will, but the cap directly and significantly destroyed many of these businesses.

 

[Haggisman]

I dont think this is quite correct.

The newer energy retailers operated very tight margins if any margins, so yes they are susceptible to price rises. However the reason we're all paying for these companies going bust is that the credit balances of customers are protected, and have to be transferred to the new provider. But the retailers who went bust didn't ringfence balances, weak regulation meant they didn't need to hold much if any capital at all. So when these companies went bust (likely paying dividends to themselves or shell companies using customer credit balances in the process), the rest of us had to stump up to refund the credit balances back to customers because that money had vanished.

It is really weak regulation that has caused this.

Yes, its partially that, although I thought that was the reason for the high standing charge?

In terms of unit rate, as someone has posted above, the wholesale price of gas is 17p/kwh for December. Is anyone here paying 17p/kwh for gas? I'm certainly not, so every kwh of gas I use results in my supplier losing 10p, multiply that by thousands of customers using thousands of kwh and tell me if you think its viable to maintain that over an extended period?