Sure there was talk about it a good while ago now, but then it just puts a higher cost on higher users (which I guess is the point) but those users won't accept that haha which would include the majority of the ones making money on it.
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Energy Prices (Strictly NO referrals!)
- Thread starter DXP55
- Start date
Soldato
Acceptance or not doesn't really come into it, you pay the rates on your tariff whether you accept them or not.
Moving SC to unit prices would benefit me as a solar user, as I can import less than most do.
I do think the SC is too high though, it's gone up a ridiculous amount in a short space of time. They probably need to lower the SC to a sensible figure and put some of that cost into the units, but not all of it.
Soldato
The age old thing that will never change
"I am a low user SC is too high"
"I am a high user SC is too low"
The reality is its very difficult to see transparency in regards the SC.
It should be the costs of the infrastructure. Ie the "fixed" part
The unit price should be the variable part, ie the costs of the generation side
The problem is the bit that sits in the middle, not really either of the above, the meter readers, the admin staff etc etc
We know they added the failed supplier stuff to the SC, it also has the green etc on it, You could argue all day about whether thats the correct way but your never going to get agreement.
Eg should high users have to pay more for the failed companies, or should we all bare the burden equally. High users aren't necessarily high users from choice.
"I am a low user SC is too high"
"I am a high user SC is too low"
The reality is its very difficult to see transparency in regards the SC.
It should be the costs of the infrastructure. Ie the "fixed" part
The unit price should be the variable part, ie the costs of the generation side
The problem is the bit that sits in the middle, not really either of the above, the meter readers, the admin staff etc etc
We know they added the failed supplier stuff to the SC, it also has the green etc on it, You could argue all day about whether thats the correct way but your never going to get agreement.
Eg should high users have to pay more for the failed companies, or should we all bare the burden equally. High users aren't necessarily high users from choice.
Its under review, Ofgem did a consultation but I dont think they will do anything more than a tweak. Head stuck in the sand. Centrica and Octopus have made public statements supporting a shift from SC to unit rates, but bear in mind if they change it, it will come with an increase to unit rates on SVR.
Also in regards to what MKW said, Ofgem have been sneakily moving variable costs to the SC from the unit rate, one of the things I have moaned about, and did mention in my reply to their consultation.
My list was something like this.
Remove energy debt costs from SC, there is a court system for recovering debts. Energy suppliers shouldnt be preferential creditors.
Move variable costs back to unit rate.
Remove admin, marketing costs etc. for suppliers from the SC, and instead add its as own surcharge on the SVR, which suppliers can compete on.
Remove unexpected costs margin (its basically a stealth margin buff, and why would this not be used for energy debt costs).
Remove green levy and fund it via general taxation, government policy.
Remove WHD and fund it via general taxation, government policy.
Require any future increases to SC non inflation related to have parliamental debate and approval.
I also made several suggestions regarding energy debt, which I wont post here as probably too controversial, but in short I think the market right now is run very badly in terms of energy debt and huge improvements could be made but would require Ofgem and the suppliers to recognise they have been doing things wrong.
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Soldato
The age old thing that will never change
"I am a low user SC is too high"
"I am a high user SC is too low"
The reality is its very difficult to see transparency in regards the SC.
It should be the costs of the infrastructure. Ie the "fixed" part
The unit price should be the variable part, ie the costs of the generation side
The problem is the bit that sits in the middle, not really either of the above, the meter readers, the admin staff etc etc
We know they added the failed supplier stuff to the SC, it also has the green etc on it, You could argue all day about whether thats the correct way but your never going to get agreement.
Eg should high users have to pay more for the failed companies, or should we all bare the burden equally. High users aren't necessarily high users from choice.
I agree there will never be agreement, but that doesn't mean there isn't a right answer. The right answer is that more cost should be on the variable rate.
This can be justified quite easily with logical arguments. The alternative cannot.
They explain on their site and if almost everyone were signed up to a green energy tariff then the grid would be much cleaner:
Where does our 100% green electricity come from?
Meet some of the solar plants and wind farms we buy energy directly from, and find out about some other ways a supplier can can fulfill their 100% renewable promise.
octopus.energy
Soldato
Every single consumer could sign up to Octopus tomorrow, it wouldn't change the fundamentals of green energy variance.They explain on their site and if almost everyone were signed up to a green energy tariff then the grid would be much cleaner:
Where does our 100% green electricity come from?
Meet some of the solar plants and wind farms we buy energy directly from, and find out about some other ways a supplier can can fulfill their 100% renewable promise.
It would increase investment in clean energy infrastructure, improving it and its capacity. Even if you ignore nuclear we will eventually fix the variance issue you seem so concerned about, the question is how long it will take; if the fossil fuel industry have their way it will be too long.
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Soldato
Exactly all that would happen if more and more people switched to a green supplier is the point in time at which we need to get really serious about grid storage (or subsidising home storage) would be brought forwards.
Opposite.
Why should paying off others debt be dependent on how much you use? It makes no sense.
The standing charge is stupidly high. But where costs are lumped makes sense
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Soldato
Not sure I understand your point. Just because people disagree because they are looking after their own interests, doesn't mean there isn't a right answer from an objective point of view. Look at the pros and cons and it's clear that more should be on the unit rate and less on the standing charge.
Soldato
Of course it makes sense. How much do you pay towards the welfare state compared to someone on £20k a year? You pay more don't you, because you earn more. You also contribute more to the NHS, the road network, local councils...
To put it objectively, if there is something the state needs to absorb, then our system in this country has a precedent towards sharing that burden proportionately. What precedent is there for poor people to take an equal share as wealthy people and why would that be fair?
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But someone who earns a lot can escape it entirely with solar array etc.
A lot of poorer people actually have high use as they don't go out much etc, can't afford schemes like solar etc.
People with disabilities would take a big hit.
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Soldato
You'd expect people with disabilities to be getting other forms of support though, which should (in an ideal world) be adjusted to be more representative of changes to underlying costs.
I agree solar is a problem. It's a fallacy though that poorer people tend to use more. Some probably do, but in the main it would tend to be related to how big your house is and how much gadgets you have going.
Re solar, there is an argument for those people to still take their fair share of the various taxes and costs loaded onto energy, and so a solar fee or tax of some sort should kick in when those costs are being avoided.
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Soldato
Hence why wealthier people would probably love it being added to the unit rate, and taken off the SC...
Soldato
Ohhhh.. NOW the standing charge is too high, is it? 
Soldato
Why….i still pay a standing charge for the electric and pay for import, so why should i be taxed for having solar?.
Soldato
I was responding to a comment saying that if the standing charge was reduced, then people with solar (who tend to be wealthier) would prefer that.
If that happened then people with solar would be avoiding some of the costs which everyone should take a fair share of, like for example the debt of failed suppliers. In that scenario, it would be fair to introduce a solar tax to ensure that people with solar were paying their fair share of those costs, because they wouldn't be paying for it through their unit rate like everyone else.
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Soldato
A solar tax? What? Lol