Energy Prices (Strictly NO referrals!)

MatsyLR said:
The cost of smaller companies going bust are being forced onto the tax payers shoulders which is a big part of the standing charge costs. Also to combat the public lowering there energy usage to cope with the increases costs by putting a chunk into the standing charges so you have no choice but to pay.
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Without derailing the thread can someone explain to me in laymans (layperson) terms why a private company going bust causes the rest of us to pay? Surely it is the share holders or investors of that company that lose out and pay the price?

People that are moved to the new companies are paying that company now so why are we paying for them going bust?

Or are we covering the loses of the people who are fixed and the prices have gone up? Surely that should come out of the profits of said company that offered fixed prices and not us?
 
Nemiyen said:
Without derailing the thread can someone explain to me in laymans (layperson) terms why a private company going bust causes the rest of us to pay? Surely it is the share holders or investors of that company that lose out and pay the price?

People that are moved to the new companies are paying that company now so why are we paying for them going bust?

Or are we covering the loses of the people who are fixed and the prices have gone up? Surely that should come out of the profits of said company that offered fixed prices and not us?
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They have not really explained it anywhere in full (I wonder why) but if you google around https://www.thenational.scot/commun...-consumers-electricity-standing-charge-hikes/
"The standing charge not only covers costs such network maintenance, administration fees and certain government schemes, it is also the part of your bill that will contribute to the cost of the 28 energy suppliers that have gone bust since last autumn."

https://www.bbc.co.uk/news/business-60878314#:~:text=It says standing charges in,which differs between distribution networks.
"The standing charge not only covers costs such network maintenance, administration fees and certain government schemes. It is also the part of your bill that will contribute to the cost of the 28 energy suppliers that have gone bust since last autumn amid a cost crunch sparked by sharply rising wholesale energy prices.

Ofgem told the BBC that the levy added to bills to pay for costs associated with energy suppliers going bust had been spread equally across the country"
"Ofgem assures me that the extra costs for failed energy companies are being spread equally across the country."

Also keep in mind that many companies (I know EDF say this) say they are not actually making any profit on the energy side of things, they are working at a loss and other areas of the business have to make up the shortfall.
 
Nemiyen said:
Without derailing the thread can someone explain to me in laymans (layperson) terms why a private company going bust causes the rest of us to pay? Surely it is the share holders or investors of that company that lose out and pay the price?

People that are moved to the new companies are paying that company now so why are we paying for them going bust?

Or are we covering the loses of the people who are fixed and the prices have gone up? Surely that should come out of the profits of said company that offered fixed prices and not us?
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Gas is regulated by ofgem whom say no consumer should be left out because of energy providers going bust.
 
dLockers said:
Gas is regulated by ofgem whom say no consumer should be left out because of energy providers going bust.
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That makes sense but all they do is say "EDF you supply this person now" and they go "OK this is our price" and that's the end of it surely?

Those millions per day extra from the standing charge going up has to be done for how long to cover what costs?
 
MatsyLR said:
They have not really explained it anywhere in full (I wonder why) but if you google around https://www.thenational.scot/commun...-consumers-electricity-standing-charge-hikes/
"The standing charge not only covers costs such network maintenance, administration fees and certain government schemes, it is also the part of your bill that will contribute to the cost of the 28 energy suppliers that have gone bust since last autumn."

https://www.bbc.co.uk/news/business-60878314#:~:text=It says standing charges in,which differs between distribution networks.
"The standing charge not only covers costs such network maintenance, administration fees and certain government schemes. It is also the part of your bill that will contribute to the cost of the 28 energy suppliers that have gone bust since last autumn amid a cost crunch sparked by sharply rising wholesale energy prices.

Ofgem told the BBC that the levy added to bills to pay for costs associated with energy suppliers going bust had been spread equally across the country"
"Ofgem assures me that the extra costs for failed energy companies are being spread equally across the country."

Also keep in mind that many companies (I know EDF say this) say they are not actually making any profit on the energy side of things, they are working at a loss and other areas of the business have to make up the shortfall.
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Thanks, that's a good answer. I'm still not liking the "extra costs are for failed companies" bit unless we are paying the unemployment part of all the employees as well instead of the government?
 
Nemiyen said:
That makes sense but all they do is say "EDF you supply this person now" and they go "OK this is our price" and that's the end of it surely?

Those millions per day extra from the standing charge going up has to be done for how long to cover what costs?
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Think it's due to the way companies buy gas upfront at an agreed rate and by taking on new customers they had to increase their supply at a higher cost. Something like that.

You'd think we'd have more buying power making deals as a country though rather than individual companies. Or even as part of a larger buying bloc, like the EU.
 
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Nemiyen said:
That makes sense but all they do is say "EDF you supply this person now" and they go "OK this is our price" and that's the end of it surely?

Those millions per day extra from the standing charge going up has to be done for how long to cover what costs?
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Credit balances. And until the market is competitive again.
 
Puzzled said:
Think it's due to the way companies buy gas upfront at an agreed rate and by taking on new customers they had to increase their supply at a higher cost. Something like that.

You'd think we'd have more buying power making deals as a country though rather than individual companies. Or even as part of a larger buying bloc, like the EU.
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Gas is a global market so we basically do do that. The issue is that for human needs vs. wants it doesn't really make sense. I mean of course people will pay not to die.
 
Nemiyen said:
That makes sense but all they do is say "EDF you supply this person now" and they go "OK this is our price" and that's the end of it surely?

Those millions per day extra from the standing charge going up has to be done for how long to cover what costs?
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Probably a simplistic view and not going to happen with the present government, but the energy industry either needs to be renationalised or at least put on a not for profit basis, like Network Rail. Then we pay a fair price across the board with no suspicion that someone somewhere is getting fat on the misery of others.

And again sorry to say this but we need to start digging our coal reserves out of the ground again and using them as cleanly as possible. Sorry Greta but that's how it is. In a largely flat cold northern country we do have limited options for hydro electric or other renewable forms of power. Let's keep people warm and ensure they can cook a hot meal or take a hot bath before crying over an iceberg thinning by 0.1cm.

I'm not oblivious to climate change - all our bulbs are either LED's or a few CFL's still kicking around. We take a bath every other day and use the same water. Just had a new A rated gas boiler fitted (well the old one was knackered anyway) with TRV's on some of the radiators. Left over water in the kettle at meal times goes in the washing up bowl. Tumble dryer only used when we have too, usually towels as I hate it when they come in stiff as a board dried outside.
 
They're not being very transparent with the standing charge increases, as it should be a temporary thing once the credit balances are paid for. They're not spending double on infrastructure and it's all very murky in my opinion.
 
kinetic747 said:
They're not being very transparent with the standing charge increases, as it should be a temporary thing once the credit balances are paid for. They're not spending double on infrastructure and it's all very murky in my opinion.
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Correct. Regionally it may differ slightly but some transparency on what its going to needs to be accountable.
 
Freefaller said:
According to the data off my smart meter, I save nearly 70p per day when I'm in the office. That said if you add up the commuting time / cost, it works out to be about the same if not a little cheaper working from home.
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Too far fetched to think that rising costs will get people back into the office which is what the government wanted all along?
 
GIBURROWS said:
Too far fetched to think that rising costs will get people back into the office which is what the government wanted all along?
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Most of the people that will be worst affected won't have been working for home, and it would have required some thought and planning which our government has shown is not their strong point.
 
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MatsyLR said:
They have not really explained it anywhere in full (I wonder why) but if you google around https://www.thenational.scot/commun...-consumers-electricity-standing-charge-hikes/
"The standing charge not only covers costs such network maintenance, administration fees and certain government schemes, it is also the part of your bill that will contribute to the cost of the 28 energy suppliers that have gone bust since last autumn."
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been posted before you don't have to google - look at the ofgem site pity the national & bbc can't read
https://www.ofgem.gov.uk/informatio...seholds/check-if-energy-price-cap-affects-you

Suppliers can decide how they structure their standing charges within the cap Ofgem sets, as long as the overall tariff structure does not lead to default tariff customers paying above the relevant cap level.
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and the cap level says
https://www.ofgem.gov.uk/sites/defa... level - 1 April 2022 - 30 September 2022.pdf
Region, i Single-Rate Metering Arrangement (benchmark consumption per annum, k) Multi-Register Metering Arrangement (benchmark consumption per annum, k)
Nil kWh m (3,100kWh) Nil kWh m (4,200kWh)
North West £166.49 £1,037.86 £166.76 £1,279.34
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they just have to fulfill the two cap criteria ie. £166 if you use nothing £1037 if you use 3100KWh THERE IS NO STANDING CHARGE SPECIFIED.
they could decide to do this (helping the low consumer) by applying tiered cost for units (you'd need a smart meter)

ie. on the basis that a 3100 user pays net £2.84/day for their 8.5 units @33.45p / unit, then charge a 2 unit a day user 66.9p/day,
so if you made standing charge 166/365=45p , make those first 2 units (66.9-45)/2 = 11p each.
 
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