Energy price rises and price cap discussion.

[Bletchleyite]

No. This is largely a government problem, there is a lot they could do to help but are choosing not to. For example, one reason given for Brexit was so they could cut VAT on electricity bills - but now they refuse to cut VAT on electricity bills.

Got to fund it from somewhere, though. They could do better (at almost everything to be fair), but they can't magic the global issues away, and just giving everyone massive pay rises will just send inflation spiralling above 20%.

 

[najaB]

Got to fund it from somewhere, though.

Funny you mention that...

Oil giant Shell's profits have soared to a record €8.6 billion in the first quarter of 2022 - almost three times what it made during the same time period last year.

The company says the increase in earnings came from higher energy prices, a strong performance from its trading arm as well as lower expenses and taxes.

The corporation isn’t alone in reporting a big rise in profits in the first quarter of 2022.

In just the first three months of this year, BP’s profits more than doubled to €5.9 billion. BP’s report shows that this money has effectively been cancelled out by its decision to cut investments in Russian oil following the invasion of Ukraine.

But these colossal earnings are the company’s highest reported quarterly profits in more than a decade - €4.3 billion more than analysts expected.

What is a windfall tax and how would it help with the cost of living?

Some European countries are already taxing fossil fuel companies for the huge profits they have made during the energy crisis.

www.euronews.com

 

[Yew]

All very well, but the money has to be paid back at some point.

If there were two 40% increases in energy prices within a year in France people would be out on the streets protesting.

I'd be interesting to see the economics of the cost of protests and strikes (they are French, after all) vs the cost of borrowing.

 

[Kite159]

And it will be interesting to see what happens in France now the election is out of the way.

 

[Bletchleyite]

And it will be interesting to see what happens in France now the election is out of the way.

France does like a bit of civil disobedience, whereas the UK very rarely resorts to that, and last time it did it was mostly just criminals taking advantage of the situation to loot etc, only a relatively small number were genuine protestors.

 

[Silver Cobra]

Looks like the proposed £200 loan to help with energy bills in October will now no longer need to be paid back, and could now potentially be up to £400.

Energy bills to be cut by hundreds as part of support package worth billions

The support package is expected to be partly funded by a windfall tax on oil and gas firms.

www.bbc.co.uk

UK households are set to have hundreds of pounds knocked off energy bills this winter as part of a £10bn package to help people cope with soaring prices.

The government is to scrap a plan to give people £200 off bills from October which would be repaid over five years.

Instead, the BBC understands that sum will be increased and possibly doubled, and will not need to be paid back.

Additional help for those on the lowest incomes is also expected.

The support, to be announced by Chancellor Rishi Sunak later, is expected to be largely funded by a windfall tax on oil and gas firms that could raise £7bn.

It comes a day after Sue Gray's critical report into lockdown parties in Downing Street and follows intense pressure on the government to do more to help people with the cost of living crisis.

Granted this won't fully cover the potential hike expected in the Autumn, but no longer having to pay it back will certainly help.

 

[duncanp]

Looks like the proposed £200 loan to help with energy bills in October will now no longer need to be paid back, and could now potentially be up to £400.

Energy bills to be cut by hundreds as part of support package worth billions

The support package is expected to be partly funded by a windfall tax on oil and gas firms.

www.bbc.co.uk

Granted this won't fully cover the potential hike expected in the Autumn, but no longer having to pay it back will certainly help.

I just hope that when the price goes up in October, the government clamps down on energy companies increasing the direct debit by more than the increase in the price cap, even for those whose accounts are in credit.

And when wholesale energy prices start to fall (is that a flock of pigs flying past my window?) the government must make sure the full amount of the price fall is passed on to consumers as soon as possible.

They may well be willing to do this, as any fall in energy prices is likely to coincide with the run up to the next general election.

 

[Wynd]

Looks like the proposed £200 loan to help with energy bills in October will now no longer need to be paid back, and could now potentially be up to £400.

Energy bills to be cut by hundreds as part of support package worth billions

The support package is expected to be partly funded by a windfall tax on oil and gas firms.

www.bbc.co.uk

Granted this won't fully cover the potential hike expected in the Autumn, but no longer having to pay it back will certainly help.

Chancellor yet again raids Scotland's worthless oil for tax cuts...Awkward.

 

[TheEdge]

I just hope that when the price goes up in October, the government clamps down on energy companies increasing the direct debit by more than the increase in the price cap, even for those whose accounts are in credit.

What, like SSE who tried to jump my electricity DD from £30 to £105? When pointed out my Smart Meter wasn't recording even close to that usage in the depths of December maybe it was unreasonable. We agreed on £50.

 

[Baxenden Bank]

To misquote Charles Dickens:
Electricity increase £950, government contribution £951, result happiness.
Electricity increase £950, government contribution £550, result misery.

And that is before the likely £950 increase in October.

Mr Micawber in David Copperfield:

“Annual income twenty pounds, annual expenditure nineteen nineteen and six , result happiness.
Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery”​

from: https://www.goodreads.com/quotes/90...-annual-expenditure-nineteen-nineteen-and-six

 

[duncanp]

What, like SSE who tried to jump my electricity DD from £30 to £105? When pointed out my Smart Meter wasn't recording even close to that usage in the depths of December maybe it was unreasonable. We agreed on £50.

That proves the energy companies are just taking the ****.

For everyone such as you who challenges their figures, there will be many more people who don't, and suffer as a result.

Your experience also shows that the line we are all being peddled about smart meters, in that they will produce more accurate bills with no estimation involved, is a load of tosh.

 

[alxndr]

What, like SSE who tried to jump my electricity DD from £30 to £105? When pointed out my Smart Meter wasn't recording even close to that usage in the depths of December maybe it was unreasonable. We agreed on £50.

That's reminded me that I should probably call mine tomorrow.

It went from £47 to £188 in March. I moved out in April (but the sale hasn't completed yet so I'm still liable for the bills) so have used nothing since. Standing charges only come to about £15 a month and yet their website only let's you drop it a small percentage, regardless of your usage history.

 

[JonathanH]

Why is every household getting a £400 discount on energy costs? That sounds like a completely incorrect use of taxpayer money when it could be used to give those who really need it a much bigger discount or the money could be saved?

Is the issue down to not being able to assess the income in a household and the cliff edges at a potential threshold? You would think it could be recovered through PAYE self-assessment or something similar. Is it really the case that higher rate taxpayers (or perhaps people at a slightly higher income threshold) can't take the higher energy prices?

 

[najaB]

Why is every household getting a £400 discount on energy costs? That sounds like a completely incorrect use of taxpayer money when it could be used to give those who really need it a much bigger discount or the money could be saved?

Indeed. It seems the kind of thing that should be means tested - even if they erred on the side of being generous around the edges it would save money over all.

 

[duncanp]

Why is every household getting a £400 discount on energy costs? That sounds like a completely incorrect use of taxpayer money when it could be used to give those who really need it a much bigger discount or the money could be saved?

Is the issue down to not being able to assess the income in a household and the cliff edges at a potential threshold? You would think it could be recovered through PAYE self-assessment or something similar. Is it really the case that higher rate taxpayers (or perhaps people at a slightly higher income threshold) can't take the higher energy prices?

There is additional support available to those who are most in need, ie:-

• an extra £300 for those who receive the winter fuel payment
• an extra £650 for those who receive certain state benefits
• an extra £150 for those on disability benefits

If you means tested the £400 that is payable to everyone, or made it payable only under certain conditions, there would inevitably be complaints from those who are left out.

It is a lot simpler to make the payment to each account, even if it means some really wealthy people who could manage the increase in energy bills also benefit.

 

[JonathanH]

It is a lot simpler to make the payment to each account, even if it means some really wealthy people who could manage the increase in energy bills also benefit.

Yes, I agree, but it could still be recovered through self-assessment. Someone doesn't have to be 'really wealthy' for the increase in energy prices to be affordable.

 

[skyhigh]

What, like SSE who tried to jump my electricity DD from £30 to £105? When pointed out my Smart Meter wasn't recording even close to that usage in the depths of December maybe it was unreasonable. We agreed on £50.

One of the good things about my supplier is that they let me set whatever DD I want, and as long as things stay on track they're happy.

 

[Howardh]

I'm sat in the Station pub in Preston. Wanted a pint on the platform but they were locking up. So I'm in the nice warm pub, £2.60 a pint. Get in!! I'll put one in a plastic cup for the train!
And put the difference to next winters power bill. I've already got an account to put spare cash in especially to pay to keep me warm. I can transfer it to OVO if I need.

One of the good things about my supplier is that they let me set whatever DD I want, and as long as things stay on track they're happy.

That's what OVO do. They don't shock you with a jump of your direct debits. And if they did you can adjust online.

 

[TheBigD]

What, like SSE who tried to jump my electricity DD from £30 to £105? When pointed out my Smart Meter wasn't recording even close to that usage in the depths of December maybe it was unreasonable. We agreed on £50.

I was with Scottish Power paying £69 per month for my 4 bed house. As I live alone, I was even in credit by £12.

I moved house earlier this month, again to a 4 bed house. Scottish Power wanted to increase it to a whopping a £383 per month. Despite speaking to them the best they could say was I may be able to slightly reduce the direct debit once I've made a the first payment. Dealing with Scottish Power was frustrating to say the least.

After much on line searching and phone calls I've mange to get £118 per month with Bulb (never heard of them before) and can reduce my direct debit anytime after my first payment.

My new smart meter tells me I've used just over £11 of energy this week so the previous £69 a month I was paying seems about right.

 

[Xenophon PCDGS]

an extra £300 for those who receive the winter fuel payment

Is that to replace or be in addition to the existing £200? Sorry, my brain is taking time to function this morning.

 

[Silver Cobra]

Is that to replace or be in addition to the existing £200? Sorry, my brain is taking time to function this morning.

That should be in addition to the £400 every household will receive. So anyone who gets the Winter Fuel Payment will get £700 total.

 

[DelayRepay]

After much on line searching and phone calls I've mange to get £118 per month with Bulb (never heard of them before) and can reduce my direct debit anytime after my first payment.

I'm with Bulb and I've never had an issue with the Direct Debit. They do occasionally email to suggest increasing it but their suggestions seem reasonable based on my usage, and you can adjust it whenever you like.

Given how many of these companies have gone bust (including Bulb, they're being managed by administrators) I would be reluctant to build up much credit. I know you get it back eventually but I understand it can take a long time if the supplier goes into administration and you end up being transferred elsewhere.

 

[TheBigD]

Given how many of these companies have gone bust (including Bulb, they're being managed by administrators) I would be reluctant to build up much credit. I know you get it back eventually but I understand it can take a long time if the supplier goes into administration and you end up being transferred elsewhere.

That's good to know thanks.. I will keep a keen eye on it.

 

[Howardh]

Reading about having credit with your comapny - and the conscquences of them going bust; I've enough credit with OVO who give 5% interest on it (better than any building society) that it almost covers the VAT bill, and probably does now I'm using so much less - at least in summer. If they went bust and I "lost" that credit, I would have to work out if, over the years, I gained more than I lost.
Would still expect it to be forwarded to the new company or returned eventually.

 

[JamesT]

I’ve now been through two energy companies going bust; Yorkshire Energy in 2020 and Pure Planet last year. In both cases I had credit with them, with Pure Planet that was due to the DD carrying on after they folded. Both of the successors (Scottish Power and Shell, respectively) took months to issue their first bill, so it was just as well there was a credit balance to set against it.

 

[Xenophon PCDGS]

I changed over to Good Energy in 2014, as both of us were believers in green energy and as both of us have/had certain infirmities, we were classed as Priority Status and Lowri Beck come quarterly to read both meters. Even though my home now has smart meters, Lowri Beck still call and check there are no problems.
My current two-year dual fuel scheme runs until the end of September 2022, so I have seen no change in price and am pleased this is the time of year where I use less energy.

 

[3141]

We moved home last year and I switched to Green who were cheap, but they folded in September and we were switched to Shell. In March Shell told us that the monthly payment would increase considerably in April, in line with the increased cap. I managed to find a fixed rate deal with Scottish Power which is higher per month than the amount we'd be paying to Shell, but this is the time of year when we're not using much energy. If the cap increases by 40% in October, when we'll be starting to use much more energy, my fixed rate payment will definitely be worth it. And it's a two-year fix with only a moderate penalty if you leave early, and no penalty if you move to another Scottish Power account..

 

[Darandio]

It's probably worth resurrecting this thread as the consultancy firm Insight have today predicted that a typical household bill will exceed £4000 by January. Might be time for some people to invest in a few more blankets and jumpers before winter, coupled with food price rises there will be families having to make serious choices between the two.

Energy bills forecast to hit over £4,200 a year

The average household could pay £355 a month, up from £164 currently, consultancy Cornwall Insight warns.

www.bbc.co.uk

Energy bills will hit £4,266 for a typical household by January next year, warns consultancy Cornwall Insight.

That's a rise of £650 for households in England, Scotland and Wales compared with its estimate just last week.

Cornwall cited regulator Ofgem's decision to change the price cap every three months instead of six and higher wholesale prices for the sharp jump.

The warning comes as the government rejects calls for further help on bills until a new prime minister is in place.

In its latest report, Cornwall has also increased its forecast for this autumn's typical domestic energy bills to £3,582, up from its previous prediction of £3,358.

The latest price cap - the maximum amount suppliers can charge customers for average energy usage in England, Scotland and Wales for October - is due to be announced at the end of this month.

Dr Craig Lowrey, principal consultant at Cornwall said its price cap forecasts had been steadily rising but the big jump in its forecasts comes as "a fresh shock".

"The cost-of-living crisis was already top of the news agenda as more and more people face fuel poverty, this will only compound the concerns."

Earlier this month, the government announced how households in England, Scotland and Wales will receive that £400 to help with rising fuel bills this autumn with the money paid in six instalments.

But Dr Lowrey called on the government to use the latest predictions of higher bills to prompt a review of the support page being offered to consumers".

"If the £400 was not enough to make a dent in the impact of our previous forecast, it most certainly is not enough now. The government must make introducing more support over the first two quarters of 2023 a number one priority."
However, he did say that without the more frequent changes to the price cap more energy suppliers might be in danger of collapse.

"Many may consider the changes made by Ofgem to the hedging formula, which have contributed to the predicted increase in bills, to be unwise at a time when so many people are already struggling.

"However, with many energy suppliers under financial pressure, and some currently making a loss, maintaining the current timeframe for suppliers to recover their hedging costs could risk a repeat of the sizable exodus seen in 2021."
He called on the government to use the latest predictions of higher bills to "spur on a review of the support page being offered to consumers".

However, he said rather than "critiquing the methodology of the cap", it may be time to consider the cap's place altogether.

"After all, if it is not controlling consumer prices, and is damaging suppliers' business models, we must wonder if it is fit for purpose - especially in these times of unprecedented energy market conditions."

 

[Xenophon PCDGS]

When the total figure of domestic energy bills that is to be capped is calculated, what percentage of that is calculated as gas and what percentage is calculated as electricity?

 

[JamesT]

When the total figure of domestic energy bills that is to be capped is calculated, what percentage of that is calculated as gas and what percentage is calculated as electricity?

https://www.ofgem.gov.uk/publications/price-cap-increase-ps693-april says

The values shown in the text above include VAT and are expressed for the current Typical Domestic Consumption Values (TDCV) of 2,900kWh of electricity, 12,000kWh of gas, and 4,200kWh of electricity for Economy 7.

So I assume that's what they're using when they express the 'price cap' as an annual figure.