Energy Prices (Strictly NO referrals!)

413x said:
I agree.
There will (as always has been) people who fall through the cracks. And it is a little more complex than income tax as you can do it

Per house - benefits rich single people in apartments vs poorwr people in bigger families in badly insulated houses.
Per person - benefits big houses, harder to keep track of.

But in general. As a principle, I do agree that individuals running expensive hot tubs or crypto rigs should pay more.

Especially if we are near rationing


But I expect they'd be waaay too many people who are already worse off who would fall foul of this. Seems to be this group who are in badly insulated homes. Or with poor heating systems or even electric heating.

Not sure how you'd make it fair.
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Some kind of tier pricing ala income tax is the only thing I can see vaguely working, and even then it's not great.

The first x kwh used per day (or month) is charged at y rate, then more usage at a higher z rate, etc.

The problem is working out the tier thresholds, and allowances for things like having kids, etc.

It just becomes too complex to actually enforce.
 
Foghorn Leghorn said:
That wasn't why they went bust. Wholesale price rose far above the price cap at the time and forced 30 suppliers into bankruptcy. The high standing charge we're currently seeing is because of the cap itself.
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Yeah, it's kind of ironic really... The measure which was put in place to protect consumers has had the effect of triply punishing those who actually put in the efforts to shop around for the best deal and those who do their best to cut their usage.

1) It has resulted in higher prices for people who shop around because the energy companies can no longer make more money from lazy people who stay on the same terrible tariff.
2) It has result in higher prices for everyone (including those who shop around) because they now need to make up the shortfall in credit balances from suppliers going bust.
3) It has resulted in higher standing charges which disproportionally punishes those who try to reduce their usage and save money.
 
krooton said:
Some kind of tier pricing ala income tax is the only thing I can see vaguely working, and even then it's not great.

The first x kwh used per day (or month) is charged at y rate, then more usage at a higher z rate, etc.

The problem is working out the tier thresholds, and allowances for things like having kids, etc.

It just becomes too complex to actually enforce.
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I think the would be so many edge cases that they wouldn't be edge cases and like said the admin for validating someone was on dialysis (for example) and not just lying would be a minefield.
 
Foghorn Leghorn said:
Because you're then unfairly punishing those who use more energy. Poor practice to add fixed costs to variable use.
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Yeah but they're all mining 24/7 or heating their indoor swimming pools!

gpuerrilla said:
It is exactly this. Much similar to the shafting we received from BT et al when we were forced to pay for 'line rental' when the infrastructure had been in place for 40+ years and milked to kingdom come, yet they still got away with it under regulatory noses until recent when line rental was deemed unnecessary.
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Apparently it was to pay for the humongous gilt edged pension schemes all the ex state employees going back years to even before privatisation.
 
krooton said:
Some kind of tier pricing ala income tax is the only thing I can see vaguely working, and even then it's not great.

The first x kwh used per day (or month) is charged at y rate, then more usage at a higher z rate, etc.

The problem is working out the tier thresholds, and allowances for things like having kids, etc.

It just becomes too complex to actually enforce.
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No more challenging than the current tax system really, a lot of the data is already available i think.

Political will would be a challenge, but as prices are likely to keep increasing, something needs to be done. A one price fits all model is inherently unfair.
 
Haggisman said:
Yeah, it's kind of ironic really... The measure which was put in place to protect consumers has had the effect of triply punishing those who actually put in the efforts to shop around for the best deal and those who do their best to cut their usage.

1) It has resulted in higher prices for people who shop around because the energy companies can no longer make more money from lazy people who stay on the same terrible tariff.
2) It has result in higher prices for everyone (including those who shop around) because they now need to make up the shortfall in credit balances from suppliers going bust.
3) It has resulted in higher standing charges which disproportionally punishes those who try to reduce their usage and save money.
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Sadly this is usually the case with government meddling.
 
Haggisman said:
Yeah, it's kind of ironic really... The measure which was put in place to protect consumers has had the effect of triply punishing those who actually put in the efforts to shop around for the best deal and those who do their best to cut their usage
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This is just society in a nutshell unfortunately. People who are sensible get screwed to compensate for those who aren't. I know thats a very broad statement but thats how it works. If you take care of your health you just get to pay more for the vast majority who don't. You work hard and earn an alright salary and pay your taxes and if you lose your job you get no more than someone who has never worked. You come to retirement and have been sensible with your money and need care, you get to pour that into your care costs and watch as people who have wasted their money get similar care for free.

The issue in the case you have mentioned is that everyone is now having to bear the costs of people who are currently on fixed deals that are a ridiculous amount under the wholesale prices being paid. Who picks up the tab? Other bill payers. You can say its prudent to fix your costs but everyone in different situations and their deals expire at different times. Some people will have fixed 6 months ago and other people will have their fixed deals coming to an end at the worst possible time.

The bigger issue is that as energy prices rocket you can bet your bottom dollar that all the companies involved will be posting record profits and not a damn thing will be done about it.
 
fez said:
The bigger issue is that as energy prices rocket you can bet your bottom dollar that all the companies involved will be posting record profits and not a damn thing will be done about it.
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It was posted earlier in the thread about the record profits of British Gas retail. Their annual profit equated to £14.75 per customer.
 
I've said it before and i'll say it again.

Regarding the cheap electric and gas we used to have and the 30 suppliers going pop this last year. It was a race to the bottom to offer the cheapest prices and to get more people onboard with a referral bonus which is all well and good when the times are good but when they can no longer afford to offer those rock bottom prices and they haven't hedged enough to run out the bad times then it all comes tumbling down and then everyones left to pay for it.

Simple fact is the electricity and gas shouldnt have never been as cheap as it was. No-one obviously wants to pay more that what they have to but we became too content with paying too little and now everything has swung the other way and we are now overpaying given the current world events and the lack of planning of those who fed the race to the bottom, price wise.
 
Surveyor said:
It was posted earlier in the thread about the record profits of British Gas retail. Their annual profit equated to £14.75 per customer.
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Eon Nexts is about £18-20 per customer i think. Business gas and electric suppliers are much more profitable than domestic which are basically loss leaders. When EON bought Npower, they only wanted to buy Npower's business arm as it was profitable but the domestic side was haemorrhaging money so the only thing keeping the business afloat was the profits from the business arm. Ofgem basically said they wouldn't sign off on the deal to take over Npower's Business arm unless they took on the residential customers which is eventually what happened and was why EON UK was operating at a loss for about 3 years.
 
Surveyor said:
Sounds great, in theory...

Energy bills: Windfall taxes have been tried before - but could such a move backfire?



Which countries and what are they doing with the money?
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Spain for one to use the money to reduce bills, look at all the other measures European countries have taken too. France committed to capping energy bill increases to 4% for instance : https://www.theguardian.com/busines...her-european-countries-tackling-energy-crisis

https://www.irishtimes.com/business...consumers-from-soaring-energy-bills-1.4776588

although Spain scaled back the measure due to resistance from utility companies according to Reuters. However, they say the EU Commission is now proposing a windfall tax across Europe on the excess profits of dirty fossil fuel producers to invest in clean energy and accelerate the transition to clean energy independence: https://www.reuters.com/business/en...aise-green-cash-eu-tell-countries-2022-02-28/
 
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ltron said:
Spain for one to use the money to reduce bills, look at all the other measures European countries have taken too. France committed to capping energy bill increases to 4% for instance : https://www.theguardian.com/busines...her-european-countries-tackling-energy-crisis

although Spain scaled back the measure due to resistance from utility companies according to Reuters. However, they say the EU Commission is now proposing a windfall tax across Europe to invest in clean energy and accelerate the transition to clean energy independence: https://www.reuters.com/business/en...aise-green-cash-eu-tell-countries-2022-02-28/
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Spain have introduced a windfall tax which will help with energy bills by, in part, temporarily reducing VAT from a whopping 21% to 10%.

The French measures don't seem to be related to a windfall tax and the European proposals won't do anything for current bills.
 
Surveyor said:
Spain have introduced a windfall tax which will help with energy bills by, in part, temporarily reducing VAT from a whopping 21% to 10%.

The French measures don't seem to be related to a windfall tax and the European proposals won't do anything for current bills.
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You say 'current bills' but these measures have been effective and in place over the past 3+ months, have they not? Whereas our government have allowed our bills to rise well over 50% and have done very little about it.

I'd much prefer the European approach to our government's vacuous proposals (a windfall tax is just one measure they could apply, but they should have a whole basket of measures ready to use not just this one, hence my linking the article to show what we are missing out on).

Also, cutting VAT on energy to 0% (which European countries have now been allowed to do if they had a rate higher than 0% in the first place https://vatineurope.com/poland-eliminates-vat-on-gasoline-gas-and-food-to-combat-inflation/) was supposed to be a benefit of Brexit, what happened to that promise?
 
ltron said:
You say 'current bills' but these measures have been effective and in place over the past 3+ months, have they not? Whereas our government have allowed our bills to rise well over 50% and have done very little about it.
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Correct. My increase has shot up twice in less than a year totalling an increase of over 65% and this is not factoring in the soon to be April rise and dread to think the next October rise.
 
ltron said:
You say 'current bills' but these measures have been effective and in place over the past 3+ months, have they not? Whereas our government have allowed our bills to rise well over 50% and have done very little about it.
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If you'd like to add recent to current then go right ahead. Unless extended further the Spanish reduction in VAT ends in May meaning they go back to paying four times the UK rate instead of the recent/current reduction to double.

ltron said:
I'd much prefer the European approach to our government's vacuous proposals (a windfall tax is just one measure they could apply, but they should have a whole basket of measures ready to use not just this one, hence my linking the article to show what we are missing out on).
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There are plenty of options available to reduce energy bills and most of those in the article you linked take the form of government subsidy or reduced taxation/levies. Presumably the UK government could go down the same route if they wish and can find the cash to do so.

ltron said:
Also, cutting VAT on energy to 0% (which European countries have now been allowed to do if they had a rate higher than 0% in the first place https://vatineurope.com/poland-eliminates-vat-on-gasoline-gas-and-food-to-combat-inflation/) was supposed to be a benefit of Brexit, what happened to that promise?
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I've no idea if there was a promise to reduce VAT on energy bills. Reducing VAT to zero in the UK wouldn't have a massive impact as it's only 5%. Most countries in Europe charge a lot more. As of January 2021:

Belgium 21%
Bulgaria 20%
Czech Republic 21%
Denmark 25%
Germany 19%
Estonia 20%
Ireland 13.5%
Greece 6%
Spain 21%
France 20% (5.50 % for the subscription part of the bill, i.e. standing charge)
Croatia 25%
Italy 10%
Cyprus 19%
Latvia 21%
Lithuania 21%
Luxembourg 8%
Hungary 27%
Malta 18% gas, 5% electricity
Netherlands 21%
Austria 20%
Poland 23%
Portugal 23%
Romania 19%
Slovenia 22%
Slovakia 20%
Finland 24%
Sweden 25%
 
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