Energy Prices

[Clown Job]

5 minutes ago, 101 said:

So is the price of electricity going up to recoup the money the companies didn't make selling gas during the winter?

That seems deeply unfair on electricity only tariffs.

And have other have said it's a joke the standing charge has shot up.

Privatisation is never about fairness 

[thepiegobbler]

OFGEM regulate it, so they can't just do what they want, will go up due to the cost to generate the electric, since around 40% of the UKs electric comes from the burning on gas, then there's nuclear, wind, coal etc, at substantially lower %.

[thepiegobbler]

27 minutes ago, oaksoft said:

When every single supplier doubles their electricity standing charge it's price fixing.

There's no other word for it I'm afraid.

Again, it's regulated by OFGEM, and it's them that regulate what the standard price is determined as, This is why it'll all show at once, is because of how it's regulated, as in effect the standard has been cheaper than what the actual cost has been, and also partly why so many have ceased trading. It's altered every 6 months currently, but with what's happened it's more than likely going to be changed more often so that what happened doesn't happen again.

Sure there was something mentioned on news last week that they're looking at doing it every 3 months, and may move more to having different costs at different times of the day, as in more expensive in peak periods.

You'll more than likely get tariffs that may have a lesser standing charge but you'll find the unit price is higher.

There's a number of things that have hit all at once which is why the costs have gone up so sharply as it'll all get passed onto the consumer, (cost of gas, companys failing, the loss of power over numerous regions recently and the cost to resolve they all have an impact) if you want to read more go onto the OFGEM website, as they're the regulator.

The Energy Networks are who deal with individual areas in the UK if there's a power cut, and they then charge the individual supplier for the cost of gas / electric in said area and this is why you'll get slightly different costs depending where you are in the UK.

[sophia]

52 minutes ago, oaksoft said:

When every single supplier doubles their electricity standing charge it's price fixing.

There's no other word for it I'm afraid.

Price fixing = two words.

You are persisting with a simplistic narrative and you would be better served avoiding hyperbole.

I'm not at all sure, given you rail against central government regulation and control, what your solution is.

Private companies or parts of private companies that are responsible for their own areas of energy from developing, building, production through to delivery and retail all have directorial responsibilities that lead them to get best value for their shareholders. Isn't this the capitalist environment you so cherish? 

[strichener]

3 hours ago, thepiegobbler said:

Again, it's regulated by OFGEM, and it's them that regulate what the standard price is determined as, This is why it'll all show at once, is because of how it's regulated, as in effect the standard has been cheaper than what the actual cost has been, and also partly why so many have ceased trading. It's altered every 6 months currently, but with what's happened it's more than likely going to be changed more often so that what happened doesn't happen again.

Sure there was something mentioned on news last week that they're looking at doing it every 3 months, and may move more to having different costs at different times of the day, as in more expensive in peak periods.

You'll more than likely get tariffs that may have a lesser standing charge but you'll find the unit price is higher.

There's a number of things that have hit all at once which is why the costs have gone up so sharply as it'll all get passed onto the consumer, (cost of gas, companys failing, the loss of power over numerous regions recently and the cost to resolve they all have an impact) if you want to read more go onto the OFGEM website, as they're the regulator.

The Energy Networks are who deal with individual areas in the UK if there's a power cut, and they then charge the individual supplier for the cost of gas / electric in said area and this is why you'll get slightly different costs depending where you are in the UK.

Sorry, but your last paragraph is just not correct, the issue with different prices is that unlike any other product where the consumer pays the cost of delivery, in the energy market it is the opposite and different regions have to pay transmission charges based on the demand rather than supply.  It is why London has one of the cheapest rates yet generates piss all.

We could of course have had cheaper power but we closed our coal fired power stations, everyone is now seeing the cost of the UK's commitment to reduce emissions.

 

[DA Baracus]

So who regulates the arsehole companies responsible for selling energy to the providers?

[s_dog]

On 25/02/2022 at 15:39, beesher said:

I'm sure there's a fairly obvious answer to this, but if you plan on staying in your current property for the rest of your days and don't answer the door to meter readers, what's to stop you under-reporting your energy usage until such time as the price has come back down to a reasonable level?

If you try to submit readings that are outside the expected range (no idea if its 5 or 10% above/below), it won't accept the readings and they'll just estimate your bill. And since its so fucking expensive, 5-10% won't save you very much.

[s_dog]

On 25/02/2022 at 18:10, dundeefc1783 said:

I am with Octupus Energy and have just gone onto the variable rate. Had a look at fixing with them for 12 months and it's more than double the variable rate..... 

Remember those variable rate prices shown in your quote will change from April 1st, from 20p & 4p to 28p & 7p (and electric standing charge doubling from 25 to 50p). So you need to base your options for fixing with that, not the price you are currently paying for another month.

[sophia]

1 hour ago, strichener said:

We could of course have had cheaper power but we closed our coal fired power stations, everyone is now seeing the cost of the UK's commitment to reduce emissions.

 

We would be warmer if we burned our houses.

The UK is not alone in phasing out coal so I'm not sure you have much of a point.

[strichener]

3 minutes ago, sophia said:

We would be warmer if we burned our houses.

The UK is not alone in phasing out coal so I'm not sure you have much of a point.

I think the point is obvious, so obvious that even you have managed to see it even if it is inadvertently.

[s_dog]

19 hours ago, Satoshi said:

And regarding these companies posting huge profits, this is not a good sector to be in - look at how many of these companies have gone out of business recently. The sector has a low ROE and everyone hates you, not a great business to be in. 

I remember being told a few years back that it's in the generation of electricity that they make most of their money and there's very little to be made in the domestic energy supply market, profits margins are pretty small, and that explains why so many have gone out of business really.  That doesn't explain why so many companies try it though?

[sophia]

15 minutes ago, strichener said:

I think the point is obvious, so obvious that even you have managed to see it even if it is inadvertently.

Sorry, I cannot see what is obvious so please indulge me 

[Satoshi]

18 hours ago, oaksoft said:

New calls for windfall tax as Shell unveils highest quarterly profit in eight years | Shell | The Guardian

‘Cash machine’ BP dismisses calls for windfall tax as profits hit eight-year high | BP | The Guardian

There's a big difference between the likes of Pure Planet going bust when they are re-selling fuel and the likes of Shell and BP who are also producers of fuel.

We've been left with the latter and they are abusing that position.

My post was specifically referring to T&D companies, not integrated O&G companies (Shell do a bit of T&D but it's a tiny part of their business, I don't know if BP do it at all.)

I don't know how they could be viewed as abusing their position by selling commodities at commodity prices. And as my post on the first page shows (bottom) they are far from the biggest producers in the UK anymore - they are just the biggest names. 

And given the commodity cycle, companies like BP and Shell struggle badly with a low oil price - nobody cares then and neither has share prices anywhere near their ATH. For many recent years the ROE on O&G was -10%. Not looking for sympathy it's just the nature of the industry they are in.

7 hours ago, s_dog said:

I remember being told a few years back that it's in the generation of electricity that they make most of their money and there's very little to be made in the domestic energy supply market, profits margins are pretty small, and that explains why so many have gone out of business really.  That doesn't explain why so many companies try it though?

QTry the T&D business? I don't know tbh it's been a cartel for a long time and lots of new small providers have tried (but they aren't integrated so just buy their energy wholesale) I'm not sure any of them have made any money out of it though.

Regarding the policy of nationalisation, I'm not saying this won't work, but you are effectively giving control to civil servants and government, I'm not sure this has proven to be more efficient than the private sector.

Re the windfall tax, that has happened before, and it's probably why the biggest investors in the North sea now are small anonymous private companies with no overhead rather than Shell or BP - who make more with less hassle elsewhere.

It's different to T&D but re running petrol stations, the price you pay is more than 50% tax - the government make more than the company running the station, paying the staff and procuring the product. Combine that with supermarkets using petrol as a loss leader and you see why this is a pretty rubbish business to be involved in - petrol stations make money on coffee not petrol.

On 24/02/2022 at 11:01, Satoshi said:

You won't find many companies selling commodities at a loss.

Although it's easy (and fun!) to blame well known European Oil plcs the fact is:

1) They make the overwhelming majority of their profits outside of the UK

2) Linked to 1, the commodity market is global. Even if BP and Shell decide to sell all their non contracted gas/oil generated in UK (not much, both have declining footprints and BP is especially small) below commodity price this would have precisely 0 effect on the market or people's energy bills. It would be a pointless, expensive gesture that might only benefit transmission companies.

3) Due to the commodity cycle the return on equity from O&G has been shit for years and the share prices reflect this (neither is close to their ATH)

4) The biggest producer in the UK is the little known private company Harbour Energy (and I think French statist Total is second) doesn't quite roll off the tongue in the same way though.

They could implement some sort of windfall tax (Osborne did the same is 2011) which is a fair enough policy - it just contributes to the UKCS being one of the most expensive regions to produce oil and gas in terms of taxation. One thing I do find fascinating is that in Canada there is a big disconnect in policies and attitude between non oil producing regions and the oil producing western regions. This doesn't exist at all in the UK context (I'd be willing to bet more than half of UK voters don't even know that there is an oil and gas industry in the UK) but you can certainly see it emerging in Scotland. Something the SNP can't do too much about either, it's a no win game for them.

As for gas and electric bills, there is always a disconnect as people can't easily see or enjoy what they are buying (the closest imperfect analogy is petrol) and if you ask people what they would be willing to pay the answers will vary greatly. It makes it a lightning rod for dissent around the world.

For those who are JAM it's a shit time no doubt, and so is inflation of any kind really.

 

Edited February 27, 2022 by Satoshi

[The Moonster]

"It's a shit time no doubt" he tells poor c***s freezing to death in their own homes next winter. 

[superbigal]

The energy cap increase in April of 54% is misleading.
I do not know why they don't publish it as the real breakdown.
Basically Gas is up 75% from around 4p to 7p per unit.
Electricity rise is lower at 33% from 21p to 28p per unit. These are roughly the standard capped rates that the majority will now be on.
In the short term most people use Gas for heating and thus costs in the summer will not hit as hard in actual usage.
Keep this all in mind particularly if thinking of signing up for fixed term deals with Gas.
Crazy to do so if you are in a period when you are not using much.

Finally maybe not one for the forum polis, but if your energy firms are currently sending estimates with readings much higher than your usage. I would be tempted not to correct them.
Clearly submitting inflated readings now before April is fraudulent and I could not endorse.

[Satoshi]

2 hours ago, The Moonster said:

"It's a shit time no doubt" he tells poor c***s freezing to death in their own homes next winter. 

Well, clearly policies should be in place to prevent this.

I would happily cut the royal family and the entire military defence budget, which will leave plenty left over to help those financially vulnerable to pay for heating.

The intent of my post is to try and shift the simplistic narrative of prices high because well known PLC is price gouging - this is misleading at best.

The policy of T&D companies ripping off their loyal customers is absolutely rancid and the government should absolutely address this. I'd rather do that than try and make companies sell commodities at a loss.

 

 

 

 

 

 

[The Moonster]

24 minutes ago, Satoshi said:

Well, clearly policies should be in place to prevent this.

I would happily cut the royal family and the entire military defence budget, which will leave plenty left over to help those financially vulnerable to pay for heating.

The intent of my post is to try and shift the simplistic narrative of prices high because well known PLC is price gouging - this is misleading at best.

The policy of T&D companies ripping off their loyal customers is absolutely rancid and the government should absolutely address this. I'd rather do that than try and make companies sell commodities at a loss.

 

 

 

 

 

 

It's just a weird angle to come at this. The end user is being shafted and as much as you want to paint the poor wee energy companies as struggling to survive they still post huge profits (yes I know smaller companies go bust, welcome to capitalism). This will kill people, if private companies deem that necessary to make further profits then absolutely f**k them as much as the government enabling them.

[invergowrie arab]

Maybe if commodities necessary for life can't be managed by the private sector then they shouldn't be involved. 

[jakedee]

Just got my email, looks like bulb are using the standing charge to increase the price which means whether I use electricity or not it goes up a whack.

[Satoshi]

2 hours ago, The Moonster said:

It's just a weird angle to come at this. The end user is being shafted and as much as you want to paint the poor wee energy companies as struggling to survive they still post huge profits (yes I know smaller companies go bust, welcome to capitalism). This will kill people, if private companies deem that necessary to make further profits then absolutely f**k them as much as the government enabling them.

Maybe, I guess I'm just coming at it from a different perspective. There are many aspects of capitalism that can and should be changed, but trying to beat the commodity cycle is something no government can do (or should try to do).

Where I live now petrol is cheaper than water, this is a government decision to not tax petrol not because oil and gas companies are feeling generous. 

And it depends what you think are huge profits, the ROE of T&D is far below discount shopping, waste disposal and not even in the same stratosphere as software. How much should they make, 1%? It's already a relatively shit business to be in.

Pharmaceutical companies make huge profits and their drugs are often out of the reach of most of the world population - this will kill more people than lack of heating.

I'm not on the side of Energy companies, but for me there are more effective policies to addressing fuel poverty than forcing companies to sell at a loss (in the long term this will only push prices up further in a nationalised or monopolised market). Ther should be state assistance for the most vulnerable and the government could cut tax on the rest of they felt it was too high (ditch the royal yacht instead).

Gas and electric are essential products that companies don't make much money selling (relative to other sectors). If you want to hate on capitalism there are many other far more deserving targets.

Hating on disincentivised loyalty programmes is absolutely fair game though.

1 hour ago, invergowrie arab said:

Maybe if commodities necessary for life can't be managed by the private sector then they shouldn't be involved. 

This arguably covers pretty all commodities though (as well as many non commodity sectors).