Why haven't energy prices come down?
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As winter approaches, and the heating is about to come on, many of us are worried about the cost of our energy bills. That's because gas prices have barely changed since they shot up 40% last year. That's despite huge falls on the wholesale energy markets - the price the companies pay. So who can make the suppliers charge a fair price for our gas and electricity?
Watchdog decided to find out, so we gathered one customer from each of the big six energy companies - npower, British Gas, Scottish Power, EDF Energy, Scottish and Southern and E.On - and took them on a little tour.
The "Who's got the power?" Tour
This was no ordinary tour. Each of our six energy customers was looking for answers as to why the prices haven't yet come down significantly. Now that the wholesale cost of energy is as low as it was two years ago, they can't understand why the average annual dual fuel bill in August 2009 was £300 more than it was in August 2007. Instead of our bills coming down, the suppliers are even hinting that they might put them up. So, who's got the power to make them listen?
We set out in our 'Who's got the power?' tour bus to find out. On our way we got to find out a little about what our energy customers thought:
Simon Bagley is with EDF Energy. He told Watchdog that companies "...need to substantiate how they can charge so much for their prices to us when the wholesale cost to them has dropped".
Derek Scotland has been with Scottish and Southern for 24 years and had this to say: "Basically in the last sort of year or so, my energy prices [have] doubled. It's come down slightly since then but it's still way over what it should have been."
Sentiments shared by David Edwin, a Scottish Power customer: "You had to accept prices going up when there was this big wholesale increase. But now they haven't played the game."
Promises, promises
David makes a good point. Our bills went up because the wholesale prices did. Everyone gets that bit. And a year ago on Watchdog, the energy companies told us that when those wholesale costs dropped, our bills would too. In fact, in March 2009 Watchdog was given an assurance by Dr Garry Felgate of the Energy Retail Association (ERA) that, "When the wholesale prices come down, the competitive market will get lower gas prices".
That isn't quite what has happened though has it? Despite our bills rising by 40%, when the wholesale costs finally did come down, in Spring, they only fell by around 10%. But the energy companies expected us to be grateful. Dr Felgate also told us in March 2009, "everybody has gotten lower prices from April, and that's a fact."
British Gas even boasted about their price reductions in a TV advertisement, declaring;
"To make your world a better place we've dropped our electricity prices. Giving you the cheapest standard electricity, on average, in Britain. Look after your world with British Gas."
The customers on our tour bus think the suppliers are only looking after their own world - a view that was enforced when British Gas announced a sharp increase in their half yearly residential profits this summer.
Watchdog Invitations
To get some answers, we invited each of the "big 6" energy companies to send someone along to join us on our tour. If they could get some face time with our customers, perhaps they could properly explain the current situation. Every single one of them said no. It wasn't a shock to our customers as they declared "surprise, surprise".
David Wise is with British Gas and told us, "Obviously they're scared of actually facing questions, which perhaps they can't answer."
During the tour, our group passed by The Houses of Parliament. For months, the government has been stating the same as our customers - they'd like to see energy bills come down.
Lord Hunt of Kings Heath (The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs) had this to say in February, when asked by Lord Tomlinson about rises in energy bills:
"The government monitors energy prices and is well aware of the significant rises in energy prices in the UK over the past year. The government expects reductions in those prices following reductions in wholesale prices."
So what are they doing about it? Does the Government have the power to make that happen? Well we couldn't find out, since no minister would agree to see us on four separate dates offered to them by Watchdog.
Instead, they sent a statement, once again saying that if wholesale costs continue downward, they'd expect prices to fall. They said the energy regulator Ofgem is there, to make sure consumers are protected.
If that's the case, we thought, what better place to stop next then Ofgem's head office to try and get some answers. Ofgem is the 'Office of the Gas and Electricity Markets', which is a non-ministerial government department, run by an authority consisting of executive and non-executive members. They are funded via an annual license fee, paid by the energy companies they regulate. But tax paper money contributes to running costs too. Here is what they say about themselves:
"Protecting consumers is our first priority. We do this by promoting competition, wherever appropriate, and regulating the monopoly companies which run the gas and electricity networks."
For months the energy companies hid behind an Ofgem report that said we weren't getting a raw deal. Now, however, even the regulator has said there's scope for prices to come down.
So what are they going to do about it? Yet again nobody would agree to meet us. Ofgem said it's up to the retailers to speak to us and tell us why they're not bringing their prices down.
Derek Scotland was furious at this: "They should be able to do something about it. That's what these people are here for. Surely, they're supposed to look after our interests, and not the interests of the power companies."
Gaynor Aaltonen is an E-on customer who joined us on our tour. She believes "They [Ofgem] are our servants, in a way, our taxes and our money is going towards them, why aren't they here, to give us some answers?"
The Power of Ofgem
In fact, Ofgem has no power whatsoever to tell the suppliers to reduce their prices. It gave up that right seven years ago, because it thought competition was keeping prices fair. The only time they can act with regards to pricing is when they have evidence that a cartel is in place. An investigation by Ofgem in 2008 (published in October 08) found no evidence of this occurring, so nothing has been done.
So who can help? The regulator can't. The government hasn't. So it looks like it's only the energy companies themselves who've got the power to bring our bills down. And so far, for whatever reason - they are not budging.
The energy companies say wholesale prices don't tell the whole story, because they've bought most of their energy many months in advance, usually at higher prices. They also say increased costs, for things like distribution and government implemented environmental fees, eat into their margins. They also say that when wholesale prices went up by more than 250% they only passed on around 40% to the consumer, shielding them from the worst of it. So when prices went up, they took the brunt of the costs.
They always seem able to come up with reasons why they are in the right. So it's a shame they didn't want to put them directly to their customers, face-to-face.
Price Analysis
John Hall is a highly respected specialist in the energy markets across Europe and he had no problems giving us his opinion.
He showed our group a graph based on figures from Ofgem (see below). It makes clear that if our energy bills don't go down, as wholesale costs continue to fall, the amount of money the energy companies get is set to rise further.
John explained to us the graph showed wholesale prices were expected to fall into the future, and as a consequence, we'd expect to see the costs to the consumer fall as well. Since, in the graph, the price we pay isn't shown to be coming down it means that the margin enjoyed by the suppliers, according to Ofgem, is likely to increase further as we move through the end of this year, towards next year. Where does that leave you, the consumer?
John told us; "Wholesale Energy costs, I think, really are going to go up in the future, but I think in the short term we need to have greater transparency to understand how those costs are made up. But I also believe costs could have come down two or three months ago and they haven't."
Needless to say, this makes our energy customers angrier as it confirms everything they have been saying. Scottish and Southern customer, Derek Scotland, told us: "I'm really annoyed about it, because you see the huge profits that these companies are making, and you wander how they can't pass these price reductions onto the customers."
Pensioner David Wise, who pays Scottish Power for his energy, had this to say: "If I were to rely just on my pension, it would be very hard going, and I know people are finding it very hard."
Gaynor Aaltonen was outraged - "What I think is that the British consumer is just being taken for a ride, and my real beef, is that the Government's just sitting back and letting it happen."
British Gas statement
"As you will appreciate, our intentions on pricing are commercially sensitive. We remain committed to doing what we can when we can for our customers, and offering competitive and transparent prices. I would point out that we were the first of the "big 6" to cut prices this year and also had the biggest cuts - 10% on both gas and electricity. "
EDF Energy statement
"EDF Energy's prices are continually under review and we are committed to providing our customers with practical and effective ways to use their energy more efficiently and save money. We also continue to lead the industry with our special help for our most vulnerable customers, notably though our Energy Assist tariff and the EDF Energy Trust Fund.
"Our prices have remained genuinely competitive during this period of unpredictable and volatile wholesale costs. For example, EDF Energy is currently the cheapest supplier among the big 6 both for a typical dual fuel standard credit customer and dual fuel prepayment customer based on a national average across all regions*.
"In order to offer our customers relatively stable and competitive prices, we buy our wholesale energy supplies many months in advance. There is always a time lag between when prices change on the wholesale market and when these feed through to domestic bills. This strategy has allowed us to smooth retail prices on behalf of customers and mitigate the effect of higher wholesale prices on our customers. In addition, Ofgem's own projections show that wholesale energy costs look set to increase during the second half of 2010.
"The supply side of our business operates in a very competitive market with companies operating with very low (and sometimes negative) margins - a situation made more challenging by the current economic climate. It is also important to remember that the wholesale price of energy only contributes to part of the cost of a domestic bill and there are other key cost components. The increasing costs of Government initiatives to address climate change, transmission and distribution charges and metering costs are all key factors in customers' energy prices.
"The profits made by EDF Energy in the UK contribute to our investment in the UK's energy infrastructure, both in generation and distribution. We are currently investing £400 million in our distribution network per year and around £500-600 million in our new CCGT gas plant at West Burton. This level of investment will increase significantly in the next few years as we continue to develop energy infrastructure such as renewables and through our plans for new nuclear.
*Typical annual consumption is defined as 3,300 kWh of electricity and 20,500 kWh of gas."
E.ON statement
"We continue to monitor wholesale energy prices closely and have no current plans to change our fuel prices."
npower statement
"We're continuing to review our prices in light of current and future wholesale energy and other costs.
"If we had aligned our prices with wholesale energy costs in 2008, we would have charged our customers an additional £250 million (£150 per dual fuel customer). Between January 2007 and September 2008, wholesale gas costs increased by 200% while npower's own gas prices increased by only 27%. "
Scottish and Southern Energy statement
"It is genuinely disappointing when one of our customers feels they cannot get their questions answered directly from us as their energy supplier. I would highly recommend you visit our website where we have posted clear information on our position on pricing. Feel free to log on to his website and have a look at these. "
Scottish Power statement
"This year we lowered gas by an average of 7.5% and electricity by 3 % - both decreases became effective on 31 March. Our Economy 7 rates are the cheapest in the market for prepayment, direct debit and prompt Cash Quarterly."
Statement from DECC Minister David Kidney
"If wholesale costs continue to fall, we expect to see further retail price cuts in the coming months, given that suppliers' margins are relatively high compared to historic levels, especially on gas. Suppliers must pass on any reduction in wholesale prices to their retail customers wherever possible, which is why we have asked the regulator to report regularly on wholesale and retail prices.
"Suppliers need to recognise the pressures on consumers in these difficult times, and consider when current trends will allow further reductions in retail prices."
Let us know what you think. Should energy prices come down? Will you be able to cope with your winter bills this year?
© MMIX~RS~q~RS~~RS~z~RS~50~RS~)
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Who's got the power to make the big 6 energy companies listen. Only us, the consumers, but they are not taking their customers seriously, so let's make them listen by putting one of them out of business. If every customer of the smallest of the 6 switched accounts, the company would be out of business within a year, and the 5 left would wake up to consumer power - because if they didn't, they would realise what was coming teir way....
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Why don't we as the consumer take this matter into our hands. Why don't we collectively protest against this.
We all should delay your energy payments untill they reduce their prices.
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Here's a simple 'make them hurt plan' - will need a bit or national organisation though.
Get customers of a majority of the BIG 6 to move to just one or two of them (completely random which ones) and watch them suffer financially, then six or so months down the track everyone change to all but one or two of the others and cause financial pain for the next lot of left-overs.
I'm sure there's a few newspapers who could organise this quite easily - there could even be a live TV draw to determine which ones are moved to and from.
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The reason the energy prices haven't come down is because the Government has no control over the U.K.'s energy supply, simply because privatisation meant that most of our power is now owned by the French. It is ludicrous that we have effectively lost control of our own power generation, forcing us to rely on other countries. The role of a government should be to provide, at a minimum, the security of power for people's homes, currently this is not even feasible. If we have a cold winter this year then there will large regions of the country experiencing "brown-outs" due to lack of capacity. The current power stations in the UK are old and need replacing but due to the fact that we don't own them, the big 6 suppliers are not obliged to build new stations as this would cost them money and hit their profits. There is only one way to resolve these issues and that is to re-nationalise the power generation sector. Until this kind of drastic action is taken, the public have literally no option but to pay what the energy providers want to charge.
Grant - Aerospace Engineer
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Only gas and electricity is ever considered in the debate.
We use wood and phurnicite 'coal' as we have no 'gas' supply. The price of each rises each year with no regard to 'energy' price fluctuations.
We buy enough fuel for our room heater, which heats radiators also, 4-6 times over the winter, each time 10 x 25 kg sacks. Each load has risen in price by £20+ every year for the last 10 years.
Last year on average our fuel for the room heater cost £600 plus roughly £450 for wood.
We have fully insulated the roof, have cavity wall insulation and solar panels for hot water.
By the way our coal man still carries it all in, sack by sack, to our bunker.
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NON PROFIT FUEL, WHO WOULDN’T SIGN UP FOR IT?
With the grotesque price of gas and electricity and millions in fuel poverty it’s high time we had a social enterprise that provides these utilities at zero profit.
Enough is enough! I’m not talking renewable energy - I’m talking basic heat and light at a price to shame the fat cats. At this point, green goes out the window.
Are you with me? or are you happy to see the old and poor choose between heat and food?
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why don't the bbc publish the home addresses of the chairmen of the energy companies and we can write to them en-mass to let them know how we feel, it would create chaos for them as each letter would have to be opened to find out if it was private or a protest letter. hundreds of thousands of letters would be pretty inconvenient!
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I've just checked my British Gas account online and i am over £280 in credit on my gas and £145 on my electricity accounts. I will be ringing them tomorrow to ask for MY money back - it's bad enough them overcharging for my gas/electricity without them earning interest on my money too.
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E-on are so hard up so they claim that they wont give there staff a pay rise of the cost of living when the other big 5 all have given there staff a raise
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Everyone is way off the mark. I work for one of these energy companies and i can tell you pretty much everything. Every company buys gas and elec in 6-12 month batches this is so we have enough so that if there is a strike or a company does bust we have sufficient supplies to keep YOU the consumer happy and warm while we get another supplier or rectify the problem. In doing so we pay a price and cant pass any savings till the next batch which coulkd take a year. Secondly, you want a fair price, we should actually be charging double, you think we just buy the gas elec and then sell to you. No we have to pay for staff, training, buildings, infastructure, power grids, power lines, general maintainance, IT equipement, OUR own energy and phone bills, paper and other office supplies, millions of cards and keys for PPM meters....etc etc You think any of this comes cheap. From that can you honestly expect us to buy elec at say 8p per unit and sell it for only 9p per unit? your having a laugh if you do
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I agree we should ALL not pay our bills for a period of months say 5 or so. I already struggle with the bill anyway and over the last 8 months have had countless reminders and bully boy letters "we have the right to enter your home" - I would shread them but I cant afford to turn the shredder on.
I am one of the many people in fuel poverty already. My take home pay is £850 and my annual duel fuel bill is just under £1500. When I contacted NPower they gave me absolutly no valueble help what so ever. I already have low energy bulbs in every room, I have cavity wall insulation, 200mm of loft insulation, double glazing. Where there are two or three lamps in a room I have removed the bulbs from all but one. I reduced the temperature of my hot water to just 55 degrees. Four of us share the bath water. We walk down the stairs in darkness. Npower said that having a dishwasher was a luxury item, so instead of putting the dishwasher on at 2am (economy electric) - I now wash the plates in cold water - And this apparantly is the 21st century.......
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Ibought a flat over two years ago in Abingdon and even when we had snow outside we never had to use the heating system.As long as we have lived here we have never used the system, we are very lucky people.
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After using the services of many of the big companies for my energy, I decided to go with a smaller supplier and have never looked back. The company I am with now actually gives me the opportunity of being more in control of my bill by rewarding me for people I refer to them. They don't just thank me on a one off introduction basis, but on a monthly ongoing basis. The more people I introduce to the company the less my bill is every month. It's absolutely fantastic I tell you!
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There is only one reason electricity and gas prices have not been lowered and the reductions passed on to the consumer and it is, The share price. This is all these companys think of. The men at the top get there bonuses if targets are met And ivestors sell shares if targets are not met , and that means ripping off the consumer. I work for such a company and it is profit above all. And the government do play a major role in these companys indirectly.
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I'm with some previous comments-target one or two or even all of the big six and say that if their prices are not dropped by a certain date then we will switch to another or smaller provider. I think that some are foreign owned so perhaps their interest in our well being may not be all it is cracked up to be. This is not anarchy but hopefully a groundswell of public opinion saying "enough is enogh" and applying a business approach. Unfortunataly I havn't a clue how to go about it. Perhaps, hopefully, the press can run with it.
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Why do people think companies earn interest when your in credit??
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I also work for one of these big companies and what gets me why do customers seem to think it just affects them, us that work for them thats not on the best pay like everyother customer we are in the same postion and i think people forget that, until we brought our home a few months ago we had it easy but now it is hard and yes all you can do is put yourself in the customers shoes as now we fully understand we have a baby and money is tight just along with most of the customer's but don't get me wrong we are all in the same boat but just with different situations....
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I am with Scottish Power i am paying £137.00 a month and we don't use that much Gas and Electric. On the show there was a sigh saying Scottish Power that we should be paying £1141 a year, i am paying £1644 a year, so that means i am paying £503 more than what i should be paying.
I would like to know am i paying to much and what can i do about it.
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i worked for one of the major companies for 5 years and and only left a few months ago,believe me they are taking the whole country for a ride.if you think there is no price fixing your wrong.its all about share holders.
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Same old regurgitated issues, so kindly repeatedly highlighted by the likes of watchdog, brilliant. However, nothing has be done to control such absurd prices and such companies get away with daylight robbery. Such companies treat people with contempt, with the endless childlike excuses which hold no substance whatsoever. The fact is this, Privatization was a good idea if it created genuine competition, in this case it has not. These companies are clearly abusing th fact that utilities are a necessity of life, so they are merely exploiting good people, focusing solely upon obscene profits.
The likes of Ofgem should clearly be abolished, like so many quangos, who do not justify such departments whatsoever.
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This is a clear case of anti-competitive behaviour - high retail prices compared to the low wholesale price AND the narrow price difference between the six main suppliers. This should be referred to the 'Securities and Monopolies Commission'. If the UK government are too afraid (or just too greedy for the tax revenue) then someone should refere this to 'The European Commission's competition authoritiy' - how much clearer a case do you need!? Look at the teeth they have when it comes to Microsoft or British Airways, so come on, we have joined the EU for this sort of protection.
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This comment was removed because the moderators found it broke the House Rules.
Getting extremely frustrated with this issue.
My supplier for gas and electricity is EDF. I have just received my bill this morning, as well as my Direct Debit review. I am in credit with both my gas and electricity, as I was the on the previous bill. So you would expect my Direct Debit payments to come down??
Not so. In fact my electricity payments have gone from £29.00 per month, to £46.00 per month. HOW DOES THIS MAKE ANY SENSE?? I can't afford this...
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It is patently obvious that the energy companies are price fixing, is everyone blind or something?!
The Office of Fair Trading need to probe the industry in the same way that it has done with the construction industry and hand out large fines and compensate affected consumers.
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"Everyone is way off the mark. etc" Such comments are merely stereotypical from those who are gaining from such legalized crimes upon society. The fact that no representative was prepared to offer any form of defiance, must mean it's defensible. Well, apart from spouting the same old rhetoric, which would be without substance, speaks for itself. Also, that the Politicians have simply played with such important issues with hollow words, simply endorses the fact that our utilities are not only a massive rip-off but also a clear abuse and sheer greed.
If it wasn't a necessity of life and we had genuine competition, I'm sure that most of the current suppliers would either be gone or at least forced to reduce prices.
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We need to renationalise the energy companies, so the government have the power to set prices - less money will go to shareholders and fat cat executives. In addition, their resources can be pooled to research environmentally-friendly energy solutions of the future.
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As a Distributor AND customer of a Utility company I find this article very interesting.I would like to let people know we have several awards by a very well known consumer magazine.As well known as Wathdog.This magazine has given us several awards,including Best customer service,Best Energy supplier and,Best Broadband and Phone bundle.Not to mention Company of the year by a very well know National news paper awards programme..All this in 09.You can save 20% to 30% on your Utilities with us.Also,some business customers have told us that they are only still in business because of the money we save them.We grew by 49% last year and are in the Top 250 companies in the country.(FTSE 250)[Unsuitable/Broken URL removed by Moderator]
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Agreeing with claremariebrooker that we are def overpaying Scottish Power..On average £1141 and in a year i am paying £2112!!! They tell me this was due to a couple of heaters being used (that we have always had) that made our bills go much higher...Now coming into winter again i am worried as at this rate i cant afford to have the heating on...i asked for it to be checked but was told i need to pay £100 charge!!
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Surely each energy supplier needs a licence from the government
If they do not play fair their licence should be withdrawn
(If there is no suppliers licence then perhaps Watchdog could become a non profit making supplier helping us all)
Why has this government allowed us to be bullied in the manner that we are by utility companies that we all need
Any political party with an ounce of common sense should pledge to sort out the cartel that operates
Logically this would save each household in the country in excess of £5 per week
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It's been apparent for MONTHS now that there is NO-ONE, either in Government, or in Ofgem that can help the consumer in this matter!
Thanks to Watchdog for opening my eyes to the fact that Ofgem is YET ANOTHER monumental WASTE of TAXPAYERS money by an UTTERLY incompetant Government, given that it has ABSOLUTELY ZERO INFLUENCE or POWER over these companies ripping us off!!!
Mr Brown, I would quite happily accept over £200,000 a year to be vocal, but utterly powerless in OFGEM!
Got any vacancies???
Watchdog has been chasing suppliers for months now and we are still no better off... Fair play to them for TRYING to put the pressure on, 'cause let's face it, NO ONE ELSE IS FIGHTING OUR CORNER! But WHY WOULD these companies drop their prices when there's no-one in an official capacity who can 'slap their wrists' ANYWAY?
Hubby and I get our Gas and Electric on direct debit from EDF, who only review customer payments every 12 months. This unfortunately means that you can amass either massive arrears, or credits, over the year! Our Electric was not reviewed in the spring, probably due to the fact that we are paying £35 per month and not had any major spikes in usage or price increases.
However, because EDF hiked their gas prices at least twice last year (the second of which more than DOUBLED the cost per unit!) when we had our yearly settlement bill in February, they advised us that we owed them nearly £340!
That was shock enough but, even after I had settled the arrears, when EDF sent our review letter, they advised us that they wanted to take our payment up from £29 per month to a whopping £140! I was horrified!
My husband rang them and refused point blank to accept this agreement and, in the end, they settled on £55 a month!
Now, I know it is the end of the summer, but our last bill showed we are currently in credit for over £200 (which WOULD have been £600 if Hubby had not told them to go swing!) That's £200 of MY money on which EDF is earning interest, and THAT'S along with ALL the OTHER EDF customer credit values too, which I can only imagine adds up to quite an impressive total!
QUITE the little nest-egg being creamed at the expense of our pockets!!!??
Government may not have any power over these profiteers, but we do!
I think the public need to get together and, as stated in a previous post, move away from the smallest of the big 6 so that it starts to struggle! I think we can discount Npower, British Gas, and E.on as pretty untoucheable (though how sweet would it be to bring B.G. to it's knees???).
That leaves us with EDF, Scottish Power and Scottish and Southern. Out of these, I would guess S&S is probably the weakest, but I don't know for certain?
If we can get ONE supplier in a stranglehold, those REMAINING (and remaining at OUR discretion, I may add!!!) would THEN realise that the public DO have the power to bring national companies to their knees, AND that we are willing to use it!
We definately need the media behind us, of which Watchdog is invaluable. Just take a look at the MPs expenses row, if you figure the public don't hold power?
The only question is, where do we go to getting the ball rolling? Perhaps Watchdog could tell us which of the Big 6 is the most vunerable?
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What is the point of us paying for an expensive presenter and a tour bus when no-one will speak to the BBC? I have not seen the figure of 40% increase quoted in any other media. I could complain but decided it was more useful to cut the amount of energy I was using and reduce bills for myself.
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I don’t' mind people saying that these fixed ones are bad but come on today’s market and we have all seen it on the news we think how these prices are going up anyone with internet are best going online anyway as they are companies cheapest tariff, but I feel that these capped and fixed prices are best as long as you can find a good one. We have gone a fix one we can't risk prices going up yet. Always look on the internet to see what your best companies and prices are call your supplier and see what the best is they can offer you as none of the companies will ring you and say we have got a cheaper tariff. I think that one of the main problems but the amount of customers companies have it would be too much. Another thing don’t just believe what people say look into things first especially from door to door sellers as the main this they tend to leave out I find they forget to tell you about the threshold for gas they for get to tell you depending on which company. ALWAYS MAKE SURE WHAT SOMEONE HAS TOLD YOU ARE RIGHT GETTING SOMEONE TO HELP YOU IF ANYTHING.
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Profits for the shareholders are essential in utilities
Why ,because ALL pension funds have substantial investments in these gold plated industries
This explanation is why official bodies refuse to intervene on behalf of the general public over the costs charged to them
Therefore if ALL utilities were properly regulated and customers charged a fair sum the return on capital would decrease along with the investment income that is funded by the British public
The effect on investment funds would be staggering
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There is an element of truth to this...
"Secondly, you want a fair price, we should actually be charging double, you think we just buy the gas elec and then sell to you."
In the report a reference was made to BG's profit levels, but I recall reading that NPower's profits were down around 56%. I'm not sure about other companies but the point is how can this be if, as you assume, business is booming?
There is a reason the goverment is doing little more than expressing a vague wish for prices to come down. They KNOW successive governments have ignored the energy issue, to the extent that we face the real possibility in blackouts.
Therefore whilst I'm loathe to continue with the present system I see littl option, nationalisation would cost money, and large sums are needed for ne power stations NOW. I'm sure the government could borrow to fund this but I think we've had quite enough of that.
Green energy be damned, France went nuclear with large amounts of gas storage why can't we copy that?
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I work for one of the big 6 having previously worked for one of the smaller Regional Electricity Companies. Prices increase as a direct result of forcing this industry into a Market Environment. Back in the day we would have looked at the end to end costs from production to supply, and had a single pricing model. OUr prices were reasonable and stable. Every utility had a heavy investment program in readiness for entering the competitive environment and areas such as Sales, Marketing, Branding, Customer Insight etc. had to be added and in turn added to our bottom line costs. Additionally the Open Market regulations forced us to make a profit at every stage of the process; production has to be profitable, distribution has to be profitable, and customer supply has to be profitable. So what with market forces and this complex pricing model of course there are price increases. Empowerment for consumers will come with the advent of Smart Metering. Different suppliers can then differentiate their service by offering more personal pricing arrangements - similar to Talk Plans on Cellphones. Individuals can then flex the way they use their energy to match the best plan for them. However these meters are very expensive so there may have to be a price increase...
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Not been in our new house a year yet,We are with e-on the first bill was £300 which we thought resonable for winter months the last bill for summer is £1,800 and they want £559 a month direct debit.We queried this and they say its right,Doesnt make sense.Its double our morgage and its only a small house.HELP...
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I've just got a letter from British Gas saying they are increasing my direct debit from £40 to £130 after my annual review! Point one, most of the figures on the bills are 'Estimated' so how can they know my actual consumption? The meter is outside my house so why do they have to estimate anyway? Point two, I'm on long-term disability benefit due to depression and other health problems caused by long-term unemployment so their bill is almost 50% of my total benefit! I've told them to think of a more sensible number or I will stop the direct debit, switch suppliers and they can get their money at a pathetically low rate. I'm trying to start up as self-employed to restore my self esteem but if they persist my plans are going out of the window.
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Further to my last post, I've just had another surprise. As well as trebling my gas Direct Debit, they are going to do the same with my Electricity DD WITHOUT EVEN TELLING ME! There was nothing on my last statement and I have not received a letter the only reason I know they are doing this is because the person from [company removed by]that I spoke to earlier today casually mentioned it in passing! I'm going to find a cheaper supplier and they can get their money in very small doses as it's all I can afford.
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The easiest way to bring oompetition to the energy market is for the government to force energy companies and comparison sites to quote actual prices per kwh. I recently tried to look at switching but everywhere I look, all they would say is how much I "could" save if I switch to them. They all say that they're the cheapest, but they would say that won't they???
The comparison sites make money by signing people up for these companies. So when they say you could save £300 by switching to a particular company, why should I trust them anymore than I'd trust a salesman?
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