Energy Bills

[ender4]

So if there is a price cap and if the cost of gas has increased to be higher than the cap, then is every company making a loss on every customer?

 

 

[Panto_Villan]

38 minutes ago, ender4 said:

So if there is a price cap and if the cost of gas has increased to be higher than the cap, then is every company making a loss on every customer?

 

 

The big companies and well run smaller companies will hedge future prices so they lock in prices / profits and protect themselves from this sort of thing. But they probably only hedge on a 6-12 month horizon so if it continues then yes, all the companies will be losing money.

Of course, though, hedging costs money. The ones going bust would have just taken on customers and hoped that energy prices didn't go up, or not enough to cancel out their profit margins. Works great and is highly profitable until it suddenly isn't.

[Genie]

18 hours ago, ender4 said:

Is the price cap per KW used or a total cap per house? 

The price cap is a maximum cost based on average usage. 
Fixed deals are currently higher than the price cap which will stay in place until April.

Options seem to be:

Stay on a variable rate (capped) in the hope that by the time it ends in April the wholesale price of gas will have come down and you can get a cheaper fixed deal.

Get on a fixed deal for a year or 2 now. You’ll pay more than the cap but protected against more rises in April. That strategy will pay off if the wholesale price continues to rise and the cap goes up in April.

[Xela]

17 hours ago, Panto_Villan said:

Of course, though, hedging costs money. The ones going bust would have just taken on customers and hoped that energy prices didn't go up, or not enough to cancel out their profit margins. Works great and is highly profitable until it suddenly isn't.

Gambling effectively? Reselling energy at a certain price and having your fingers crossed it doesn't go up. Seems a shit business model!  

Its why I have always stuck with one of the 'big 6' (or is it 5 now with mergers?). That and pure laziness  

[lapal_fan]

Essentially what we're seeing is the after effects of last year when oil was so cheap, Americans we're paying people to take it from them. 

I'd guess (and it is only a guess) that prices will normalise just after Xmas. 

Were due quite a mild winter this year as well, so demand will hopefully square off and we'll have enough capacity in storage. 

[lapal_fan]

Here's an extract of the Sept 3rd Market Report;

Sept 21;

Bullish

There are four additional cases of maintenance scheduled at nuclear plants during September.  This is in addition to ongoing outages which have been extended.  As a result, the UK’s call on gas-fired power generation may increase, particularly during periods of lower renewable output.

Bearish
Planned maintenance on the Nemo interconnector has been shortened to the 20th–23rdSeptember, from the 26th previously.  This may result in higher-than-expected imports overall next month, which may reduce reliance on other sources of costlier thermal generation. 

Summer 21;

Bullish

Reports suggest demand could be higher year-on-year due to the MET Office revising their temperatures milder for the coming months.  In turn, higher demand for power could drive prices higher.

Bearish

According to the latest long—term forecast , solar output in the UK is set to be largely above the seasonal average in the coming weeks.  This may provide a boost to overall renewable output and could limit costlier thermal generation.

Winter 21;

Bullish

There is currently maintenance scheduled on the Brit Ned interconnector which is expected to continue into the start of October.  This could see lower imports at the start of the winter period.  Furthermore, if this coincides with low renewable output and a cold weather spell, power prices could increase.

Bearish

If the UK experiences a mild winter, there may be less pressure on the supply and demand balance.  Moreover, if the continent experiences colder weather the UK may end up exporting power across the interconnectors.  In this scenario, prices may begin to decline, and shed the premium added approaching this winter period.

[Panto_Villan]

52 minutes ago, Xela said:

Gambling effectively? Reselling energy at a certain price and having your fingers crossed it doesn't go up. Seems a shit business model!  

Its why I have always stuck with one of the 'big 6' (or is it 5 now with mergers?). That and pure laziness  

Yeah it is indeed a lot like gambling and that's why they're going out of business now.

That said some of the new companies are really good (I mentioned Octopus earlier in the thread) and have got to be a decent size, so it's worth considering a move away from the big 6 if you could save some money by doing so.

[foreveryoung]

My fixed runs out the end of the month. EDF wanted a extra £450 or something like that, insane. Tried some comparison sites including Octopus all around

£250 extra fixed for 2 years, then came across one which had British Gas fixed at a extra £80 a year, so just signed up to that, seems fair.

What are peoples average bills per annum, gas and electricity combined, can never believe mine. I mean we haven't had central heating on for 6 months and our gas usage seems excessive.

[Genie]

Official advice from uSwitch is… don’t switch. Ride out the winter on the price cap.

Hopefully they are pretty confident the prices will come down in the new year.

[Genie]

Just had my contract through following my switch to British Gas

Quote

About your tariff	Gas	Electricity
Supplier	British Gas (British Gas Trading Limited)	British Gas (British Gas Trading Limited)
Tariff name	The Peoples Tariff	The Peoples Tariff
Tariff type	Variable~	Variable~
Payment method	Cash or Cheque	Cash or Cheque
Unit rate	3.987p per kWh	20.317p per kWh
Standing charge‡	26.123p per day	23.770p per day

I assume these are right up at the max they are allowed to charge me?

Edit:

It looks like my Gas is going from 2.12 p/kwh to 3.987 p/kwh -> ~88% increase.

Electricity from 13.85 p/kwh to 20.317 p/kwh -> ~47% increase.

 

Edited October 23, 2021 by Genie

[foreveryoung]

31 minutes ago, Genie said:

Just had my contract through following my switch to British Gas

I assume these are right up at the max they are allowed to charge me?

I've changed to this one, worked it out at being about another £80 a year, so not to bad. Was with EDF previous, wanted about £400 extra.

[Genie]

9 minutes ago, foreveryoung said:

I've changed to this one, worked it out at being about another £80 a year, so not to bad. Was with EDF previous, wanted about £400 extra.

I’ve just worked it out, I was on a really good deal before so the jump is much bigger.

Its going from £993 a year all in to £1553 with like-for-like usage (£46 a month increase to £129 a month should cover it).

Edited October 23, 2021 by Genie

[foreveryoung]

Just now, Genie said:

I’ve just worked it out, I was on a really good deal before so the jump is much bigger.

Its going from £993 a year all in to £1553 with like-for-like usage (£46 a month increase).

Ouch! Mine was around the same previous, hope I've worked it out right, my payments are £88 a month, we'll see if that changes after the first quarter. EDF well mugged me off the first year with them. They said £65 a a month which I thought was low, then banged me with a £700 bill. Took a full 12 months for them to tell me I wasn't paying enough. Ended up paying about £260 a month over 6 months to clear it off, mugs!!

[Genie]

50 minutes ago, foreveryoung said:

Ouch! Mine was around the same previous, hope I've worked it out right, my payments are £88 a month, we'll see if that changes after the first quarter. EDF well mugged me off the first year with them. They said £65 a a month which I thought was low, then banged me with a £700 bill. Took a full 12 months for them to tell me I wasn't paying enough. Ended up paying about £260 a month over 6 months to clear it off, mugs!!

I always keep an eye on my actually usage to avoid a nasty surprise like that. Hopefully gas prices fall in the new year and some savings appear via new fixed deals.

 

[maqroll]

Heat pumps are the way to go. 

[Genie]

8 hours ago, maqroll said:

Heat pumps are the way to go. 

£6-£18k here.

My house, and boiler, are only 3 years old so i’ll see how things are when it’s warranty runs out in about 7 years.

[Anthony]

17 hours ago, Genie said:

Just had my contract through following my switch to British Gas

I assume these are right up at the max they are allowed to charge me?

Edit:

It looks like my Gas is going from 2.12 p/kwh to 3.987 p/kwh -> ~88% increase.

Electricity from 13.85 p/kwh to 20.317 p/kwh -> ~47% increase.

 

Well isn't this interesting? I, like many people at the poorer end of society, am on a prepayment meter. Below is what I've been paying for YEARS.

Electricity unit rate: 20.43p per kWh
Daily standing charge: 27.68p per day

Gas unit rate: 4.410p per kWh
Daily standing charge: 30.78p per day

And we wonder why poor people remain poor.

[PaulC]

57 minutes ago, Anthony said:

Well isn't this interesting? I, like many people at the poorer end of society, am on a prepayment meter. Below is what I've been paying for YEARS.

Electricity unit rate: 20.43p per kWh
Daily standing charge: 27.68p per day

Gas unit rate: 4.410p per kWh
Daily standing charge: 30.78p per day

And we wonder why poor people remain poor.

Never understood why you have to pay more per unit  when you are paying in advance. These prepayment meters are a big con and like you say its the poorest end of society that have to pay it

[Davkaus]

1 hour ago, Anthony said:

 

And we wonder why poor people remain poor.

It's so true about many thngs. Energy is a big con, renting costs more in the long run than owning, buying in bulk is cheaper if you can afford the up front cost, same for annual bills that you can pay less in one go, or pay monthly which ends up costing a good chunk more. And so many things are "buy cheap, pay twice". Being poor is expensive.

[It's Your Round]

Being poor is very expensive, that’s true. Prepay gas and electric has always been much more expensive than the dual DD version. My mother in law has one for her electric, I’ve been telling her to change it for years but she won’t. 
 

I’m with Octopus Energy, who emailed me last week to ‘recommend’ I increase my monthly DD by £90. Citing that I’m using a bit more and they’d like me to be £350 in credit when next winter comes. We do use a lot with five people in the house and a hot tub to run, but £90 extra seems excessive. What I paid last year was enough so I told them I’d pay an extra £30 but that’s it. It’s nice to be able to just email an agent and not have to ring up, I’ve been quite impressed with Octopus so far… the £90 thing aside.