Energy Prices (Strictly NO referrals!)

[Yaayuh!]

Yep, it’s almost like essential services should be publicly owned rather than privately.

 

[Zenduri]

Yep, it’s almost like essential services should be publicly owned rather than privately.

If it was publically owned nothing would change, it would just be people complaining about gov fat cats making large bonuses and selling consultancy contracts to their mates and it would probably be ran worse than any company right now. Plus if you didnt like how they treated you or the increases in the prices then you couldnt just up and leave them to a rival.

Profit margins are notoriously low in the energy market too, i think i saw the other day that our profit per residential customer is £20 a year currently. If that customer calls us or emails us onceor twice it wipes out the profit for that customer and turns to a loss.

 

[dlockers]

Its OK thought guys because its all of us that will have to cover the ****** trying to game the system to save themselves a few quid. A fantastic example of the sort of thinking that has the country in such a mess. I'm alright, **** the rest of you.



It doesn't need to be in state control, it just needed some vague level of sensible rules to stop companies operating on such fine margins that are serious price fluctuation would kill them. Plenty of people had called out Bulbs business model amongst others. They were basically relying on low wholesale prices for years to come in order to make their business model not a ******* mess.

Maybe giving people 2 year fixed energy deals isn't a great idea in a market that can fluctuate wildly.

This smacks a bit of things like pensions as well. Where some people have been given deals that are far too good and they get to keep those deals and everyone else does even worse as a result as they have to subsidise them.

Companies with hundreds of thousands of regular customers should have to run a tight ship and unless they are in a very healthy position they shouldn't be able to do anything that removes money from the company and they should have to operate in a safe manner.

Bulbs business model was fine. Everyone who signed up to it knew the risks. In such a model where you pay the market rate/fully variable, you hold the contingency. In a fixed model, the energy provider holds the contingency. They aren't offering fixed deals for the best interests of consumers, you know.

The issue was that the price cap was impossibly low given the hugely irregular circumstances we are facing at the moment.

 

[mrochester]

If it was publically owned nothing would change, it would just be people complaining about gov fat cats making large bonuses and selling consultancy contracts to their mates and it would probably be ran worse than any company right now. Plus if you didnt like how they treated you or the increases in the prices then you couldnt just up and leave them to a rival.

Profit margins are notoriously low in the energy market too, i think i saw the other day that our profit per residential customer is £20 a year currently. If that customer calls us or emails us onceor twice it wipes out the profit for that customer and turns to a loss.

I might be naive but why not just have energy costs be cost price +5-10% margin. Use the 5-10% margin to build a buffer to give back to energy customers to smooth cost spikes. No shareholders extracting profits out of the company.

 

[Zenduri]

I might be naive but why not just have energy costs be cost price +5-10% margin. Use the 5-10% margin to build a buffer to give back to energy customers to smooth cost spikes. No shareholders extracting profits out of the company.

Great idea. Assuming everyone pays their bills... which they dont, pays them on time...... which they dont and that there are no huge shifts in retail costs like there has been in the last year let alone any other unforseen expenses.

The whole point is the sharesholders are taking a risk on the business to fund it, so yes if the business succeeds then there has to be some pay out. If it fails then RIP MONEY

 

[b0rn2sk8]

I might be naive but why not just have energy costs be cost price +5-10% margin. Use the 5-10% margin to build a buffer to give back to energy customers to smooth cost spikes. No shareholders extracting profits out of the company.

The wholesale costs doubled over the course of weeks off the back of a few months of consistent rises. They simply went up so fast, the cap which is only reviewed every 6 months killed them off. Any buffer they did have got burnt through (pun intended) in weeks as customers shifted from being a £20 profit a year to losing hundreds per month. In the case of bulb, times that by a couple of million.

 

[fezster]

If it was publically owned nothing would change, it would just be people complaining about gov fat cats making large bonuses and selling consultancy contracts to their mates and it would probably be ran worse than any company right now. Plus if you didnt like how they treated you or the increases in the prices then you couldnt just up and leave them to a rival.

Profit margins are notoriously low in the energy market too, i think i saw the other day that our profit per residential customer is £20 a year currently. If that customer calls us or emails us onceor twice it wipes out the profit for that customer and turns to a loss.

I dont disagree with you that public ownership would be no better - but had to call you up on the bold part. Energy companies have made obscene profits from the hike in prices. They may well structure themselves so that their retail arms make small profits, but ultimately they are raking it in.

 

[fez]

Bulbs business model was fine. Everyone who signed up to it knew the risks. In such a model where you pay the market rate/fully variable, you hold the contingency. In a fixed model, the energy provider holds the contingency. They aren't offering fixed deals for the best interests of consumers, you know.

So giving crazy referral fees whilst offering the best prices on energy was fine? Their business model was fundamentally fragile.

And remind me who is paying for Bulbs **** up?

 

[dlockers]

So giving crazy referral fees whilst offering the best prices on energy was fine? Their business model was fundamentally fragile.

And remind me who is paying for Bulbs **** up?

It was a fully variable rate - the referral fee was paid for by other members. The cap killed them.

 

[fez]

It was a fully variable rate - the referral fee was paid for by other members. The cap killed them.

How can you offer the cheapest energy and say that the existing customers were covering the referral fees? Either other companies were making silly margins or they were too close to the edge.

Of course the cap killed them. They were "too big to fail" which is something which should never happen to companies that deal with large numbers of customers in vital areas of business like banking, utilities etc.

There are plenty of smaller and larger companies that haven't gone under. So why is is no ones fault that Bulb did?

Companies are not run on a default, homogenous plan. They have different risk tolerances and growth plans. My point is that when you become a certain size, in a certain sector you should have to be more robust than normal expectations.

 

[dlockers]

How can you offer the cheapest energy and say that the existing customers were covering the referral fees? Either other companies were making silly margins or they were too close to the edge.

Of course the cap killed them. They were "too big to fail" which is something which should never happen to companies that deal with large numbers of customers in vital areas of business like banking, utilities etc.

There are plenty of smaller and larger companies that haven't gone under. So why is is no ones fault that Bulb did?

Companies are not run on a default, homogenous plan. They have different risk tolerances and growth plans. My point is that when you become a certain size, in a certain sector you should have to be more robust than normal expectations.

Right, but if there wasn't a cap, they could have raised prices inline with their wholesale rate + margin. If you can't raise prices in an environment when prices are rising, how does any business stay in business?

 

[fez]

Right, but if there wasn't a cap, they could have raised prices inline with their wholesale rate + margin. If you can't raise prices in an environment when prices are rising, how does any business stay in business?

By making sure that they are saving enough money when times are good. Thats literally how everyone is told to manage their money. Its accepted that if you live on the edge of your means, you can't blame anyone else if suddenly your costs rise and you can't afford them.

This is one of the fundamental issues with the way businesses are run. The people who take huge amounts of money out of companies are insulated from the consequences of running a business badly.

The energy sector works like most others that require large amounts of future resources. They lock in pricing based on a mutually agreeable rate for the goods in the future. They may pay more than market value in hindsight but its safer and dependable. They have to top that amount up based on actual demand if its higher than expected but thats what they do. Thats their business. Thats their sector.

I agree that the cap should have been raised slightly as an emergency but I completely disagree that they couldn't have weathered this storm. Plenty of other smaller and large companies have done. So what is different about Bulb other than their business model and how they chose to run their company?

 

[Foghorn Leghorn]

In 11 years i have never seen nor heard of anyone going "oh hey, this customer gave a false reading ZOMG fraaaaaaaaaaud lets report him to the popo". The usual response is, "sigh, they're trying it on, lets get them billed and we'll chase them if they own us money"

The police would laugh at you if you tried to report it as fraud

You're far too forgiving, I'd be telling the customer they're an idiot and swapping their meter for a prepayment meter on the worst tariff

 

[dlockers]

I agree that the cap should have been raised slightly as an emergency but I completely disagree that they couldn't have weathered this storm. Plenty of other smaller and large companies have done. So what is different about Bulb other than their business model and how they chose to run their company?

Ok glad we agree

The others are oligopolies that have been fixing prices for their own personal gains for years. They also have massively diversified business models.

The smaller ones that survived mostly offer specialist tariffs where they are effectively over charging during the day to get their gains, no?

 

[SDK^]

I might be naive but why not just have energy costs be cost price +5-10% margin. Use the 5-10% margin to build a buffer to give back to energy customers to smooth cost spikes. No shareholders extracting profits out of the company.

In that scenario, imagine the cost of energy today for the consumer !!
People are complaining about the cost of energy now with a price cap, without one, a large proportion of the UK wouldn't be able to afford energy.

 

[mrochester]

In that scenario, imagine the cost of energy today for the consumer !!
People are complaining about the cost of energy now with a price cap, without one, a large proportion of the UK wouldn't be able to afford energy.

The price cap doesn’t stop us having to pay for the cost of energy as the money has to come from somewhere to pay for the rising energy costs.

 

[b0rn2sk8]

Bulb were rarely offering the cheapest energy in the market. At times they were but most of the time they were in the ball park but not the cheapest.

In fact the company that we’re consistently the cheapest is still alive, that is ‘OutFox’. I’m not sure who they are owed by but they must have some serious cash behind them to keep alive through all of this.

The likes of Scottish power, EDF etc are all massive companies and their retail arms are only a small proportion of their business.

 

[Combat squirrel]

If it was publically owned nothing would change, it would just be people complaining about gov fat cats making large bonuses and selling consultancy contracts to their mates and it would probably be ran worse than any company right now. Plus if you didnt like how they treated you or the increases in the prices then you couldnt just up and leave them to a rival.

Profit margins are notoriously low in the energy market too, i think i saw the other day that our profit per residential customer is £20 a year currently. If that customer calls us or emails us onceor twice it wipes out the profit for that customer and turns to a loss.

Its comments like this that make up everything that is wrong with the world.

Weird how you assume private ownership has changed things - course it hasn't, its just driven the energy service to the public into the floor, with minimum effort, to maximise profits, private ownership = the absolute bare minimum to provide energy - no company will upgrade its infrastructure unless it HAS TO because it takes away from profits.

Public ownership however provides a funds pool to upgrade things for the benefit of the entire system, instead of funnelling money to a few already rich people.....quite obvious really, any reply or argument against this simply shows you'd rather money went to already ultra rich people, instead of looking at it from a profit perspective it HAS TO BE looked at from a humanitarian perspective.

Capitalism has had its day, and now its gradually unravelling, INCREASING profit year on year cannot be done, forever, at all, in our life time an entire system change will come in, human basics like energy, water, food & shelter will have to be run with an aim to sustain that for all people rather than making billionaires slightly more rich billionaires, which in itself is mental, if you think about it, they just expect to keep getting more money, rather than capping it at 5x the amount they put in, for example - its literally, robbery.

 

[jonneymendoza]

Its comments like this that make up everything that is wrong with the world.

Weird how you assume private ownership has changed things - course it hasn't, its just driven the energy service to the public into the floor, with minimum effort, to maximise profits, private ownership = the absolute bare minimum to provide energy - no company will upgrade its infrastructure unless it HAS TO because it takes away from profits.

Public ownership however provides a funds pool to upgrade things for the benefit of the entire system, instead of funnelling money to a few already rich people.....quite obvious really, any reply or argument against this simply shows you'd rather money went to already ultra rich people, instead of looking at it from a profit perspective it HAS TO BE looked at from a humanitarian perspective.

Capitalism has had its day, and now its gradually unravelling, INCREASING profit year on year cannot be done, forever, at all, in our life time an entire system change will come in, human basics like energy, water, food & shelter will have to be run with an aim to sustain that for all people rather than making billionaires slightly more rich billionaires, which in itself is mental, if you think about it, they just expect to keep getting more money, rather than capping it at 5x the amount they put in, for example - its literally, robbery.

I locked down a new fixed tarif where the energy price is double what i was and triple for gas.....

 

[fez]

Its comments like this that make up everything that is wrong with the world.

Weird how you assume private ownership has changed things - course it hasn't, its just driven the energy service to the public into the floor, with minimum effort, to maximise profits, private ownership = the absolute bare minimum to provide energy - no company will upgrade its infrastructure unless it HAS TO because it takes away from profits.

Public ownership however provides a funds pool to upgrade things for the benefit of the entire system, instead of funnelling money to a few already rich people.....quite obvious really, any reply or argument against this simply shows you'd rather money went to already ultra rich people, instead of looking at it from a profit perspective it HAS TO BE looked at from a humanitarian perspective.

The only sane argument for privately owned utilities is that the public sector is fantastically badly managed in so many ways. That could be fixed if people were will to accept that the best people cost money and that sometimes you have to spend money to save money. If you ran the public sector like an actual business but without the shareholders and pure focus on profit then it would be great.

The public has been turned against that idea though over many years. My partner works in the NHS and its a mess. They have managed to exemplify all the worst elements of the public sector into one glorious whole. Up to a point there is a reason why people don't trust the public sector but that could be fixed.