[Mailman]

Originally Posted by meldrewreborn

@Mailman

The energy suppliers are able to hedge for future prices and so have a large degree of confidence. Since fixed tariffs are only a small proportion of the market (less than 15% i seem to recall) there is little danger of them not being able to deliver on their promises.

Agreed but my comment "Fixed price products do have price certainty with them and cannot be quantified - something which is often forgotten." was really getting at the fact that fixing for the customer means you don't have to fret about the cost of the tariff during the period of the fix and can budget with much more certainty especially as the flexible tariffs can and do change dramatically as we have seen (in both directions). And it is this price certainty that is appealing to me personally over the next 15-24 months deciding what to do from April 1st 2024. One could argue that going to a flexible tariff is more of a 'gamble' as the certainty aspect only lasts 3 months. The indications are that July will see another price reduction in the cap which makes my decision a little more difficult.

[meldrewreborn]

@Mailman

Absolutely. The other thing is in summer I use only a very small amount of gas, so any savings below the variable price cap figures for that fuel will be quite marginal. I don't have my supplies with just the one company so its easy for me to fix on electricity but also to leave gas till later in the year.

[meldrewreborn]

@Mailman

Indeed the variable tariff is a gamble too - but since the overwhelming majority are on that tariff their might be a sense of safety in numbers. Moving to a fix involves making a decision and acting on it, whereas there's no action needed to stay on variable.

according to OFGEM, 3 million fix and 29 million variable customers as at January 2024.

[Mailman]

Originally Posted by meldrewreborn

Moving to a fix involves making a decision and acting on it

and accepting (in hindsight) that it might not be the cheapest decision if you do the sums a year or so later 🤔

[wildroverandy]

I certainly get that. It's just that the announced reduction in the next tariff came so quickly after I signed to a fixed deal.

It was not a decision taken lightly at the time, and of course we know that it is a gamble before we signed up (seems to be a lot of rather patronising comments there), and I knew the terms before we signed up. That's not my point.

My original comments were a round about way of saying, should energy supply be a business at all? It never used to be! Should it still (again?) be a publicly owned service, providing energy to households at whatever the best price point is at any given time, without having to mess about switching companies, and worrying about whether you really did pick the right tariff.

Ever since it was sold off, I have never been able to come to terms with the fact that energy can be supplied by so many different companies, yet the energy supply is using the exact same infrastructure, and usually coming from the same sources. I mean you cannot choose to buy just Eon electricity or gas) and have just that delivered to your house.

The entire structure of energy supply is a mess. This is just my opinion of course, but considering how it can affect so many peoples lives, it seems a very immoral way to do it.

Of course I realise that this is an argument for a monopolised service, and do we really want to got back to that? I don't know, I don't remember it ever being any worse than it is now though.

With so many things increasing in price at the moment, it's not a simple matter of fixing my budget for the next year, but trying to find the best prices at any given time. This time I probably made a bad choice, and in hindsight I should have heeded the get out clause more seriously, but nevertheless, I feel it's still a bit on the harsh side not even allowing me a switch within the Eon tariffs.

Certainly being businesses, none of the suppliers have any obligation to have any moral standards. That's made clear by the fact that they increased their prices to the maximums allowed, moaned about the cost to them, but most still posted obscene, and higher than ever, profits despite that.

Take from that as you will, I'm just getting down from the soap box now ;-)

[meldrewreborn]

I see your point but I don't agree with it.

Yes it may be the same electricity or gas, but the suppliers in normal circumstances can charge for it at different prices to their competitors. The sector was privatised many moons ago and for a long time the market worked well for some who could understand the offers available and switch suppliers and tariffs often. But the bulk of the population never got to grips with that and the number of customers who never voluntarily switched was quite high. That led to customers on the suppliers standard Variable Rates in effect paying a loyalty premium - or suckers rates - which led to the introduction of the price cap to protect them.

Monopoly of supply doesn't work in consumers favour. Not is it normal in any field in the UK any more - perhaps the TV licence is an obvious exception.. We're free to buy our phones from many suppliers - not just BT, we buy our groceries from many different shops (even though most of the products are the same in each, although at differing prices, and in essence its the competition between supplier that keeps prices the lowest.

Why then should energy be different?

[wildroverandy]

Originally Posted by meldrewreborn

I see your point but I don't agree with it.

No problem. It is just my own thoughts, and opinion. I never expected agreement.

Yes it may be the same electricity or gas, but the suppliers in normal circumstances can charge for it at different prices to their competitors. The sector was privatised many moons ago and for a long time the market worked well for some who could understand the offers available and switch suppliers and tariffs often. But the bulk of the population never got to grips with that and the number of customers who never voluntarily switched was quite high. That led to customers on the suppliers standard Variable Rates in effect paying a loyalty premium - or suckers rates - which led to the introduction of the price cap to protect them.

In part I disagree with some of that. In my experience over the years, switching tariffs in theory could save money. However, in reality it never did, not really. The savings were often pretty minuscule, and often over a years cycle there was really very little difference by the time you'd evened out any price changes that each supplier made over that time. They were all up and down so much, it was impossible to really keep up with the changes, and earlier on it was too slow to change over.

Monopoly of supply doesn't work in consumers favour. Not is it normal in any field in the UK any more - perhaps the TV licence is an obvious exception.. We're free to buy our phones from many suppliers - not just BT, we buy our groceries from many different shops (even though most of the products are the same in each, although at differing prices, and in essence its the competition between supplier that keeps prices the lowest.

Why then should energy be different?

Perhaps it is different - energy, and water, are the basics needed for existence. Is it right that they are monetised for profits so aggressively, when people can't afford to pay for them, it's affecting their health, or they're even dying.

TV doesn't matter in all this, it's just entertainment (even then, the existence of the TV Licence is at risk now). Groceries is a completely different market anyway, with so much variability of stuff available. Besides, it's not the supplier that keeps the prices at the lowest, it's pressure from the supermarkets that dictates the prices they want to pay for stuff from the suppliers.

I certainly don't have any better answers. Just mulling this over really. The monopoly being what it was at the time, was such that we weren't being ripped off by keeping share holders happy either. It seems to me that having a more open market hasn't worked out so great either. Would we actually have seen our bills hitting £4000 if that had remained, who knows?

In any case it took tax payers money to control the prices, of which we'll eventually have to pay back anyway.

I dunno, it all just seems to be a great mess right now.

[Andy65]

I think it's actually quite a complex subject @wildroverandy and I don't think it's as simple as would we be better off if the utilities were state owned. My understanding is that wholesale gas prices tripled due to the invasion of Ukraine and a perceived potential shortage of gas due to countries moving away from Russian gas. As far as I know there never was a shortage as such but the wholesale markets dictate the price. Then there's the eco side of things where gas is the latest evil etc, it all comes at a cost.

If our gas and electric were state owned then I would think the same increases would have happened. Being state owned doesn't mean that a business is efficient or necessarily operates in the best interests of the consumer.

It's just my opinion but I think the TV Licence is a good example. It worked for many years when the BBC offered a core service with minimal competition. Now that consumers have such a large range of alternative sources to choose from, the BBC are trying to compete in areas that they don't need to and so consequently want more and more funding. The problem is that they're governed by the Charter and are compelled to offer this, that and the other. They've broadened their offering when really they should be narrowing it down to suit their market, if they were a private company that's what they would have done.

[DebF_EONNext]

Hey @wildroverandy I'm Deb one of the community coordinators, it's nice to meet you!

I agree with a lot of what you say in that it can be confusing when deciding what to do. If you're ever unsure you can always get in touch with an energy specialist, while they can't tell you what option to take - they can talk through what's available and the benefits of each to help you make an informed choice on what's available at the time.

I myself am with another supplier. I recently bit the bullet and took their 1yr fixed deal with a £50 exit fee. It's a few pence per kWh less than the April price cap, however it's still a bit of a gamble as the prices could go down again in July. If this is the case when July comes I will do another calculation and see what's available. If the saving on what's available at the time is more than £50 then I will switch again, even if it does only save £20 it's still £20!

I know that not everyone has the same knowledge or are able to work out what their best options are so I always say talk it through with someone first to make sure 😊