Update here.
There's a big debate over who should foot the bill for insulation and energy-saving measures under ECO (the Energy Company Obligation).
Up until now the suppliers have had to pay, passing the cost to customers -- adding around £90 to the energy bill.
But after the recent outcry over energy prices, those same suppliers now expect the Chancellor to shift the cost to taxpayers, with the news expected in 5th December's Autumn Statement (shouldn't it be the Winter Statement?).
EDF put up its prices by less than the others, saying it was assuming the Chancellor would lighten the burden. Other companies have said they'll scale back the price hikes they have already announced.
But millions of customers are on fixed price deals. The prices they pay are not supposed to change, raising the risk that they might not benefit from the heralded cut in bills.
Well, I hear from npower today that they will pass on any price reductions to fixed rate customers, even though -- according to the small print -- they don't have to.
Will the other suppliers do the same? They won't want to look like Christmas Scrooges, will they?
Showing posts with label electricity. Show all posts
Showing posts with label electricity. Show all posts
Thursday, 14 November 2013
Thursday, 24 October 2013
Energy bills have more than doubled
A typical dual fuel gas and electricity bill was £610 a year in 2004.
That figure has now risen to £1,320 -- and more than £1,400 for many after the latest round of price increases, including Scottish Power today.
Of that the so-called green levies account for about £112.
So bills have doubled in less than a decade, even if you lop off the green levies.
The £112 is set to rise to £194 in 2020.
It includes £47 from the ECO -- the obligation on suppliers to insulate some people's homes and renew their boilers -- and £11 from the Warm Home Discount, a scheme to reduce bills for low income customers.
See this from DECC on page 78 for the breakdown of the green charges which David Cameron says he is going to roll back.
That figure has now risen to £1,320 -- and more than £1,400 for many after the latest round of price increases, including Scottish Power today.
Of that the so-called green levies account for about £112.
So bills have doubled in less than a decade, even if you lop off the green levies.
The £112 is set to rise to £194 in 2020.
It includes £47 from the ECO -- the obligation on suppliers to insulate some people's homes and renew their boilers -- and £11 from the Warm Home Discount, a scheme to reduce bills for low income customers.
See this from DECC on page 78 for the breakdown of the green charges which David Cameron says he is going to roll back.
Wednesday, 17 April 2013
Npower strikes back
The chief executive of npower has taken a lot of stick for the fact that his company paid no, or virtually no, corporation tax for 3 years. That 2009, 2010 and 2011.
He was criticised by MPs, was in my piece on Radio 4 news last night and got a mauling in the papers.
So here's Paul Massara's defence.
He was criticised by MPs, was in my piece on Radio 4 news last night and got a mauling in the papers.
So here's Paul Massara's defence.
Thursday, 4 April 2013
Doorstep wolves should never have been unleashed
Here's a shocking case of door-to-door sales reps tricking and pressurising unsuspecting customers into switching gas and electricity suppliers.
They use false claims about prices, bribes and straightforward blarney to hoodwink people.
Some victims are switched without their knowledge, using information about relations who have died or details obtained from the electoral register to fill out supplier transfer forms.
Quite rightly the company is fined millions of pounds.
Ofgem, the energy regulator, says: “Mis-selling causes great confusion and distress for individuals, often those who are most vulnerable."
"It also damages customers’ confidence in switching suppliers which means that they may not be benefiting from consumer choice as they should."
Familiar? No this isn't SSE (Scottish & Southern Energy) in 2013. It is London Electricity, including Virgin Energy, in 2002.
How quickly we forget. It's as if energy companies only just started ripping off customers.
No one has any sympathy for SSE, punished by Ofgem yesterday for its nasty selling tactics.
But why was this still happening between 2009 and 2012, as Ofgem describes in horrendous detail?
Sadly, there is more to this long-running tale of mis-selling, exploitation and profiteering than the predatory methods of several companies.
You see, the scene was set by government reforms and regulators. They actually wanted those doorstep sellers to be on the streets, knocking on doors and ringing bells.
Gas was privatised in 1986, electricity in 1990. Then gas was opened up to competition in 1996 and electricity two years later.
The dogs of competition were unleashed. The authorities thought they would be sheepdogs, herding customers towards better prices.
In fact, they were wolves.
And because the received wisdom was that most customers would pay less if they switched supplier, not much was done.
They may have been wolves but they were doing God's work, so to speak.
It was a very damaging situation:
*It was wrong for people to be hoodwinked
*It was wrong for the industry to be allowed to get away with it for years
*People lost out. Once they'd saved money by switching the first time there was a real danger that the next time they would end up paying more.
Now, the main suppliers have pledged to stop selling on the doorstep when they haven't been asked to make a visit.
The fact is, they should never have been allowed to do it in the first place.
Some victims are switched without their knowledge, using information about relations who have died or details obtained from the electoral register to fill out supplier transfer forms.
Quite rightly the company is fined millions of pounds.
Ofgem, the energy regulator, says: “Mis-selling causes great confusion and distress for individuals, often those who are most vulnerable."
"It also damages customers’ confidence in switching suppliers which means that they may not be benefiting from consumer choice as they should."
Familiar? No this isn't SSE (Scottish & Southern Energy) in 2013. It is London Electricity, including Virgin Energy, in 2002.
How quickly we forget. It's as if energy companies only just started ripping off customers.
No one has any sympathy for SSE, punished by Ofgem yesterday for its nasty selling tactics.
But why was this still happening between 2009 and 2012, as Ofgem describes in horrendous detail?
Sadly, there is more to this long-running tale of mis-selling, exploitation and profiteering than the predatory methods of several companies.
You see, the scene was set by government reforms and regulators. They actually wanted those doorstep sellers to be on the streets, knocking on doors and ringing bells.
Gas was privatised in 1986, electricity in 1990. Then gas was opened up to competition in 1996 and electricity two years later.
The dogs of competition were unleashed. The authorities thought they would be sheepdogs, herding customers towards better prices.
In fact, they were wolves.
And because the received wisdom was that most customers would pay less if they switched supplier, not much was done.
They may have been wolves but they were doing God's work, so to speak.
It was a very damaging situation:
*It was wrong for people to be hoodwinked
*It was wrong for the industry to be allowed to get away with it for years
*People lost out. Once they'd saved money by switching the first time there was a real danger that the next time they would end up paying more.
Now, the main suppliers have pledged to stop selling on the doorstep when they haven't been asked to make a visit.
The fact is, they should never have been allowed to do it in the first place.
Tuesday, 30 October 2012
Energy price "concern"
A senior official from the energy regulator, Ofgem, has voiced concerns about government plans to make sure gas and electricity customers benefit from the lowest prices.
Andrew Wright, Ofgem's senior partner for markets, told MPs that "Not all consumers will be in positions where they will necessarily want to be moved onto the cheapest deal with their supplier."
The Prime Minister said on 17th October that he would legislate so that energy companies "have to give customers their lowest tariffs".
Suppliers were shocked by the remark, which implied that they could be forced to switch customers to their standard tariffs.
But later David Cameron clarified the policy saying that the coming Energy Bill would "ensure that customers get the lowest tariffs".
Today Mr Wright explained Ofgem's worries, saying: "It would be a concern if someone who was paying a modest premium for a green tariff, for example, was automatically switched onto the standard tariff."
He added: "Similarly the choice between fixed term and variable is one where a consumer may choose to pay a higher price in the short term in order to get the stability in the longer term."
He said he understood that the government was fully aware of the concerns and he expected any policy proposals which emerge would recognise that.
Andrew Wright to the Energy & Climate Change Committee:
"Not all consumers will be in positions where they will necessarily want to be moved onto the cheapest deal with their supplier. My understanding is that the government is fully aware of that and I would expect any policy proposals which emerge would recognise that.
"One way in which that could be guarded against is providing customers with the opportunity of opting out of any automatic switch, that does give a safety valve."
Friday, 12 October 2012
Why our energy bills are stupid
British Gas's 6% price rise has highlighted an absurdity about the way in which we are charged, and pay for, gas and electricity.
The point is that prices will continue to go up over time, almost inevitably. Hence, we need to reduce consumption, both to hold down our bills and to reduce carbon emissions.
Yet the pricing structure we are faced with actually encourages consumers and businesses to use more.
Most tariffs have a daily standing charge or they start high and then go down once you have burned up a certain amount.
Low users tend to pay the most per unit.
Why not turn the system on its head: start low, then impose higher tariffs if you use more, rising to penal rates?
That wouldn't be in the suppliers' interests, because they're in the weird business of trying to sell more energy, while having to fly the flag for energy conservation.
But it would cut usage of gas and electricity - and protect people and businesses who did their best to remain within reasonable consumption limits.
There's a hint today from British Gas on can be achieved.
It says that despite hefty price increases in recent years, customers bills have only gone up in line with inflation, because they are using less.
One reason is that people simply can't afford to turn on the heating.
Wouldn't it be better if they paid less for what they really needed, but a higher charge for wasting energy?
The point is that prices will continue to go up over time, almost inevitably. Hence, we need to reduce consumption, both to hold down our bills and to reduce carbon emissions.
Yet the pricing structure we are faced with actually encourages consumers and businesses to use more.
Most tariffs have a daily standing charge or they start high and then go down once you have burned up a certain amount.
Low users tend to pay the most per unit.
Why not turn the system on its head: start low, then impose higher tariffs if you use more, rising to penal rates?
That wouldn't be in the suppliers' interests, because they're in the weird business of trying to sell more energy, while having to fly the flag for energy conservation.
But it would cut usage of gas and electricity - and protect people and businesses who did their best to remain within reasonable consumption limits.
There's a hint today from British Gas on can be achieved.
It says that despite hefty price increases in recent years, customers bills have only gone up in line with inflation, because they are using less.
One reason is that people simply can't afford to turn on the heating.
Wouldn't it be better if they paid less for what they really needed, but a higher charge for wasting energy?
Friday, 5 October 2012
Blackouts + higher prices
If you want to get alarmed about the squeeze on electricity supply and the possibility of power cuts today's report from the energy regulator, Ofgem, will give you plenty of ammunition.
The risk factor is rising rapidly. Blackouts affecting up 1.5m households are rated as a one in 3,300 year event at the moment (i.e. close to no risk at all), but as a one in 12 year event in 2015/16.
This is because of the decommissioning of coal power stations, in line with environmental rules, something successive governments have been well aware is set to happen.
It's not just your electricity supply which is at risk, the squeeze will cause prices to jump yet again, according to Ofgem.
"Tough environmental targets and the closure of ageing power stations would increase the risk to consumers’ energy supplies and could lead to higher bills," says Ofgem in its statement.
The risk factor is rising rapidly. Blackouts affecting up 1.5m households are rated as a one in 3,300 year event at the moment (i.e. close to no risk at all), but as a one in 12 year event in 2015/16.
This is because of the decommissioning of coal power stations, in line with environmental rules, something successive governments have been well aware is set to happen.
It's not just your electricity supply which is at risk, the squeeze will cause prices to jump yet again, according to Ofgem.
"Tough environmental targets and the closure of ageing power stations would increase the risk to consumers’ energy supplies and could lead to higher bills," says Ofgem in its statement.
Thursday, 17 May 2012
Trouble keeping warm
Last autumn's sharp gas and electricity price rises pushed an extra 400,000 English households into fuel poverty, according to the Energy Department, DECC.
It says that "price rises in the latter part of 2011 lead to an increase of around 0.4m households", taking the total to 3.9m.
Since then we've seen a modest cut in prices earlier this year, but British Gas has indicated that prices will rise significantly again before the coming winter.
So the fuel poverty total is likely to rise once more.
Fuel poverty is defined as households which spend more than 10 per cent of their income keeping warm.
It says that "price rises in the latter part of 2011 lead to an increase of around 0.4m households", taking the total to 3.9m.
Since then we've seen a modest cut in prices earlier this year, but British Gas has indicated that prices will rise significantly again before the coming winter.
So the fuel poverty total is likely to rise once more.
Fuel poverty is defined as households which spend more than 10 per cent of their income keeping warm.
Wednesday, 23 November 2011
£280 on energy bills
The Energy Secretary Chris Huhne has revealed that the cost of policies to deal with climate change will add £280 to household energy bills by 2020.
The policies, including support for renewable energy, will add 27% to the price of electricity.
However, he said that energy efficiency measures, such as home insulation, would cut bills by more than that. So the overall effect would be a £94 reduction in bills, a drop of 7%.
The figures ignore any increase in the underlying price of gas and electricity, which will add significantly more to the cost of heat and power.
The government is introducing a Green Deal next year, enabling households to pay for insulation out of the future savings they achieve from having it installed.
Energy companies will have to provide £1.3 billion a year to ensure everyone is able to benefit from the Green Deal, no matter their income or the type of house they live in.
The policies, including support for renewable energy, will add 27% to the price of electricity.
However, he said that energy efficiency measures, such as home insulation, would cut bills by more than that. So the overall effect would be a £94 reduction in bills, a drop of 7%.
The figures ignore any increase in the underlying price of gas and electricity, which will add significantly more to the cost of heat and power.
The government is introducing a Green Deal next year, enabling households to pay for insulation out of the future savings they achieve from having it installed.
Energy companies will have to provide £1.3 billion a year to ensure everyone is able to benefit from the Green Deal, no matter their income or the type of house they live in.
Friday, 21 October 2011
Social tenants to miss out on £120 solar savings
A pioneering project to provide 22,000 tenants of social housing schemes with solar panels generating free electricity is in jeopardy.
Fears that the government would cut back subsidies for solar installations have prompted backers to withdraw their support.
The project had been planned by Empower Community, a social enterprise, with support from eight local authorities and housing associations, along with charities and a major pension fund.
Empower says families would have saved an average of £120 a year off their bills, by using free solar power during daylight hours.
The project was to take advantage of a subsidy arrangement, called a feed-in tariff, designed to encourage renewable energy generation. Householders are paid a generous price for any renewable power they manage to produce.
It was well known that a reduction in the rates on offer for solar electricity was likely to be implemented in April next year.
But there has been mounting speculation that ministers will announce a cut of as much as 75% and bring it in from January, after receiving a stampede of applications for the help.
"I was gobsmacked when I heard," says Alex Grayson, managing partner of Empower Community, "The policy is being cut off at the knees."
We all pay for the subsidies, through our electricity bills. They have been criticised for costing electricity users too much and for benefiting mainly richer households and big investment funds.
But Empower argues that its project would have redressed the balance, saving money for low-income families, many of them using pre-payment meters and paying the highest prices for power.
Installations were planned for Wales, Yorkshire, East Anglia and Lincolnshire, with the work starting in January and finishing in March.
Tens of thousands of installations planned by other organisations could be affected as well.
Each home would have had between 8 and 12 solar panels fitted on a south-facing roof, providing the occupants free electricity for 25 years.
In practice, the panels were expected to save between £100 and £250 from a typical electricity bill, depending on how much electricity families could take advantage of while the sun was shining.
Any leftover power would be sold on the National Grid, with the profits and the subsidy shared between the social landlord and financial backers.
The Department of Energy and Climate Change told the BBC that all the subsidised tariffs were being considered in a Comprehensive Review.
"We've made clear that tariffs will remain unchanged until April 2012 unless the review indicates the need for greater urgency," added a DECC spokesperson.
However, once rumours started circulating that the Department was planning to pull forward a cut in rates, Empower's financial backers put £175m of support on hold.
If the right financing was in place, it is thought that a million housing association and council homes could be suitable for solar panels.
Wednesday, 14 September 2011
Help if the energy bill is a problem
Scottish & Southern is bringing in its prices rises from today. Eon's price hikes came in yesterday and npower's arrive on 1st October. Scottish Power and British Gas tariffs have already gone up.
The CCCS (Consumer Credit Counselling Service) says that a third of people with debt problems are also in fuel poverty - they're struggling to pay their bills.
If you're having trouble paying for gas and electricity, here are some places to go to for help:
Home Heat Helpline 0800 336699
CCCS Debt Remedy
My Money Steps
British Gas, Scottish Gas Trust
Other British Gas help
And check with your supplier for help, if it's another one.
Winter Fuel Payment
Cold Weather Payment
The CCCS (Consumer Credit Counselling Service) says that a third of people with debt problems are also in fuel poverty - they're struggling to pay their bills.
If you're having trouble paying for gas and electricity, here are some places to go to for help:
Home Heat Helpline 0800 336699
CCCS Debt Remedy
My Money Steps
British Gas, Scottish Gas Trust
Other British Gas help
And check with your supplier for help, if it's another one.
Winter Fuel Payment
Cold Weather Payment
Friday, 18 February 2011
How British Gas nudges you into paying more
Are we too trusting, too gullible or too stupid?
Like many businesses, British Gas doesn't much care which word describes us best. It's just keen to take advantage.
Hence the message the company is sending out to customers who were on its Websaver tariff, which is guaranteed to be 6% lower than its Standard tariff:
"We would just like to remind you that your WebSaver 5 energy tariff is coming to an end on 28 February 2011. As a result, you will be automatically transferred on to our standard gas and electricity tariff so you don’t need to do anything."
Granted, they include a link which explains how much the average Standard bill will be, though not comparing it to yours. And, later in the note, there is a link which guides you to a comparison of all their tariffs.
But why not provide the comparison up front and show that your charges will rise to fill that 6% gap?
The point is that customers really do need to do something, and fast. The obvious move would be to renew the Websaver tariff or they could shop around.
Plenty of them will put in some research to discover the best deal but, inevitably, a number of customers will not. They will end up paying more for their gas and electricity for months or even years.
And British Gas's profit margin will get a little bit fatter.
Like many businesses, British Gas doesn't much care which word describes us best. It's just keen to take advantage.
Hence the message the company is sending out to customers who were on its Websaver tariff, which is guaranteed to be 6% lower than its Standard tariff:
"We would just like to remind you that your WebSaver 5 energy tariff is coming to an end on 28 February 2011. As a result, you will be automatically transferred on to our standard gas and electricity tariff so you don’t need to do anything."
Granted, they include a link which explains how much the average Standard bill will be, though not comparing it to yours. And, later in the note, there is a link which guides you to a comparison of all their tariffs.
But why not provide the comparison up front and show that your charges will rise to fill that 6% gap?
The point is that customers really do need to do something, and fast. The obvious move would be to renew the Websaver tariff or they could shop around.
Plenty of them will put in some research to discover the best deal but, inevitably, a number of customers will not. They will end up paying more for their gas and electricity for months or even years.
And British Gas's profit margin will get a little bit fatter.
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