Energy Prices (Strictly NO referrals!)

[Mercenary Keyboard Warrior]

What stop accepting money? Can’t see that myself.

The generators would be running at a loss if they were capped.
They buy the resources to produce the energy, if its costing them more per unit than they are allowed to charge they will stop. Its simple economics.
(Think what happened in regards the C02 last year, exactly the same principle)

The ones that own the infrastructure (like wind turbines) would have to be forced to supply the UK rather than export.

Frankly capping the generators wont work.

 

[Mercenary Keyboard Warrior]

I wonder what they’ll do if they decide to cap energy prices for those of us fixed slightly higher than the cap. I’m sure there’ll be a fair few.

If your slightly higher it may well be worth sticking with that cap just for peace of mind

If its materially higher then either pay the exit fee (if you have one and they enforce it).
Suppliers vary but some certainly have no fees to exit anyway

 

[Doobedoo]

Who are we talking about? It can’t be those that have been announcing record profits after record profits.

 

[Mercenary Keyboard Warrior]

Who are we talking about? It can’t be those that have been announcing record profits after record profits.

Some will be

Thats the problem, its complicated

You have extraction, generation and supply. With some spanning one, two or three of them in various company structures.
Some of the extraction is outside the UK, by non UK companies, such as the Saudi state. We can't cap the prices they charge.

We also don't have supply constraints against UK extraction being forced to be supplied to the UK.

 

[Haggisman]

The generators would be running at a loss if they were capped.
They buy the resources to produce the energy, if its costing them more per unit than they are allowed to charge they will stop. Its simple economics.
(Think what happened in regards the C02 last year, exactly the same principle)

The ones that own the infrastructure (like wind turbines) would have to be forced to supply the UK rather than export.

Frankly capping the generators wont work.

I assume he meant the extractors - e.g. the ones actually pulling the gas/oil/etc. out of the ground and making ridiculous money doing so because their costs haven't actually increased so much.

Although that's still potentially an issue, as if there is less supply than demand, guess who goes to the back of the queue when shortages start to occur (hint: it's not the countries who are willing to pay the asking price).

 

[Mercenary Keyboard Warrior]

I assume he meant the extractors - e.g. the ones actually pulling the gas/oil/etc. out of the ground and making ridiculous money doing so because their costs haven't actually increased so much.

Right so if thats what he meant then its a significant change

Your going to have to make them primarily supply the UK first.
What are you going to do about foreign registered companies (I believe some are) that have the extraction licences, and paid for that. (So would probably sue us as its highly likely their interests are protected in those licences)

Thats not the place to set the price restriction logically.

If you want to get money from them then make changes to the tax system, such as a specific export tax, and super profits taxation etc.

Then you still haven't fixed the issues with the large amounts of fossils imported from outside UK extraction, are the UK government going to refund the importers part of the cost so they can be equal cost going into our energy mix?

 

[chrcoluk]

Economy 7 rates are pretty poor though, not much cheaper than single rate and nowhere near the Octopus Go overnight rate that is the benchmark.

I had to put a jumper on last night in the house. Winter is coming.

Yep, smart meter tariffs are more competitive.

I think an issue with E7 is Ofgem limit the offset from peak to off peak.

You should move to the east midlands, nights still very warm here. Probably all the way until October.

 

[chrcoluk]

OVO have not backed down with me. Wouldn’t accept it on the phone but when I emailed the complaint through they replied back pretty quickly to confirm it was ok to remain where it is. They gave me a rough estimate of my predicted usage (shame they don’t break it down properly like other providers) and asked me to keep an eye on it - of course I will!

My problem was them treating me like I don’t know how to handle my bills and usage and despite explaining my usage last year was excessive due to baby they assumed it would now always be like that. I checked back and my gas usage was 3 times higher than pre-baby.

I’m predicted to stay in credit until November and then I’ll see about top up payments / upping my DD a bit.

Ombudsman time?

People have had success with them recently on energy complaints.

 

[platinum87]

Pound falls to lowest level against dollar since 1985

It comes after the Bank of England warned that little could be done to stop a recession in the UK.

www.bbc.co.uk

Good news on the inflation front though. Still high but not the crazy 18 - 20% being talked about a few weeks ago.

The price cap will mean more inflation, not less.

If there is no cap, or a high cap as previously forecast, this would reduce inflation.

The article doesn't say what is actually getting capped. Is it the price retailers can charge or the price generators can charge?

And in either case, since the UK is interconnected with Europe, if someone's revenue is capped then their cost is not - will the UK government be funding private businesses to avoid them going bankrupt?

I do not understand the distinction in this regard, the answer is both, which is why they are called suppliers.

And they will subsidize them by printing money, otherwise they will go bankrupt. Keeping in mind that they are all very bad companies in the first place, let alone in this current situation.

 

[chrcoluk]

Not gonna lie, I really don't like the idea that we are capping the energy prices at potentially such a low bar. Some people need more help that others but we will be paying for this for years and the people who will benefit most from this are people who can most afford it.

It will also disincentivise people from being super careful with their energy usage.

As is always the case with these things, its a balance between giving targeted people the help they need vs the difficulty and cost of doing that.

Its not very low still expensive, but I agree a simple catch all cap feels wrong, I think it should be tiered.

We not going to get truss targeting anything meaningful at the poorest it goes against hers and half her cabinet ideology.

 

[413x]

A cap isn't a great idea.
Direct credit for the poorest (not sure how you measure it though) would have been ideal.

Or a 1st 10KW per day is capped.

Something to help poor/typical use. But to not subsidise mansions, heated pools etc.

 

[Mercenary Keyboard Warrior]

The price cap will mean more inflation, not less.

If there is no cap, or a high cap as previously forecast, this would reduce inflation.



I do not understand the distinction in this regard, the answer is both, which is why they are called suppliers.

And they will subsidize them by printing money, otherwise they will go bankrupt. Keeping in mind that they are all very bad companies in the first place, let alone in this current situation.

It depends what you mean and it what timeline

In the short term which most people are talking about the price cap will be deflationary on the CPI vs what we would have seen
Its highly likely to be inflationary in the long term, although it may not be significantly different to what we would have seen short term, just spread further out

 

[chrcoluk]

A cap isn't a great idea.
Direct credit for the poorest (not sure how you measure it though) would have been ideal.

Or a 1st 10KW per day is capped.

Something to help poor/typical use. But to not subsidise mansions, heated pools etc.

Who will pressure her though? Kier has gone Tory lite mode and had the same plan but weaker.

 

[413x]

Who will pressure her though? Kier has gone Tory lite mode and had the same plan but weaker.

No one. Its just a comment. I know we are on a path that benefits those with the greatest wealth the most.

Seems completely backwards when so many public services are falling apart.

 

[~Mike~]

Wish there was a cap for the price of Heating Oil.

This issue was raised in todays PMQ's, Liz is going to look after everybody!

What about those who use heating oil?

Victoria Atkins Tory MP for Louth and Horncastle, highlights the plight of around 1.5m households across the countryside who she says rely on heating oil, but are not covered by the energy price cap.

She says their prices have risen by 130% in recent months - will they be included in the government's new plans?

The PM says we need to make sure we look after everybody in "this very difficult winter that we're facing".

Let's see what's announced tomorrow.

 

[Mercenary Keyboard Warrior]

A cap isn't a great idea.
Direct credit for the poorest (not sure how you measure it though) would have been ideal.

Or a 1st 10KW per day is capped.

Something to help poor/typical use. But to not subsidise mansions, heated pools etc.

I partly agree

The issue is more the collision between indirect help and direct taxation

Indirect will be given the benefit which is mainly consumption based and as such benefits everyone equally based on consumption as a % but not in monetary terms
Its going to be direct taxation thats likely to pick up the repayment and hence a different collection demographic (potentially)
But if they target indirect taxation to try to recover this later then there would be a pretty good correlation between those who benefitted most (higher spenders) and the amount of higher indirect tax paid in future.

 

[b0rn2sk8]

Hasn’t heating oil dropped back from its peak so it’s ‘only’ about twice what it was where was gas approaching 5X the price it was?

 

[Devilman]

Hasn’t heating oil dropped back from its peak so it’s ‘only’ about twice what it was where was gas approaching 5X the price it was?

Gas is directly linked to electricity generation, so the price keeps climbing. Heating oil is not.

 

[b0rn2sk8]

Gas is directly linked to electricity generation, so the price keeps climbing. Heating oil is not.

Think you mean the other way round, electricity pricing is pegged to the gas price.

Heating oil comes from different sources at the end of the day and it’s much closer to diesel than anything else.

My comment was more around people calling for a heating oil price cap when in reality the price hasn’t climbed anything like gas has.

 

[Devilman]

Think you mean the other way round, electricity pricing is pegged to the gas price.

Heating oil comes from different sources at the end of the day and it’s much closer to diesel than anything else.

My comment was more around people calling for a heating oil price cap when in reality the price hasn’t climbed anything like gas has.

No, I do not mean it the other way around. Electricity demand is driving the price increases in gas, since gas is used significantly within Europe to generate power.

In "normal" circumstances you are correct, but we are far from normal circumstances and what is fundamentally driving gas prices is the demand for it to generate power.

Heating oil has still increased over 200% in a couple of years, so I don't really think it's fair to claim it's price hasn't climbed "anything like gas" it's just been happening over a slower, longer period than the "spike" we're seeing in gas demand due to it's requirement for electricity generation as well as heating / cooking etc..