Ofgem to tackle 'complex and unfair energy bills'

http://www.bbc.co.uk/news/business-12802591

Regulator Ofgem has told energy firms they must offer simpler tariffs to help consumers compare prices.
The regulator said that customers were "bamboozled" by a complex system of tariffs, which have increased from 180 to more than 300 since 2008.

Ofgem said it had also found evidence that the "big six" energy firms "have adjusted prices in response to rising costs more quickly than they reduced them when costs fell".

A long overdue review of Energy providers in my opinion.

[Taf]

The original rules to aid competition allowed customers to change supplier very 28 days... that was a joke as suppliers could take months to allow the changeover.

Now suppliers tie customers in to longer and longer "contracts" with discounts only given at the END of a year or longer, plus punitive charges if you do leave them for "admin costs".

OFGEM needs to look at all the dodgy practices, not just the odd one....

[mertle]

so much for privatasation drives competition and costs down. Every one of these utilities have raked in millions. Have we really seen any benefits.

Another legacy of thatcher ruining the country so rich chums make millions.

Should scrap the privasation of utilities bring it into national fold.

Ofgem is powderpuff and largely powerless.

Originally Posted by mertle

Should scrap the privasation of utilities bring it into national fold.

I'm relieved to say that you are dancing a very lonely dance there Mertle. State ownership is now largely confined to history, and with few serious politicians calling for its return I think we can safely assume that's where it will stay.

[Taf]

[Tali]

change supplier very 28 days

Not many suppliers actually enforce this rule. Nor do you have to wait for one change to complete before initiating the next. Serial changers are more likely to experience difficulties though because of the complicated processes that have been imposed.

Now suppliers tie customers in to longer and longer "contracts"

So do many other companies. Virgin Media, mobile phone companies, insurance companies, car break down services... The list goes on.

As for profits, all companies have to make a profit. I am told that energy companies profit margin is around 5% and that the profits they make are not excessive when compared to similarly sized companies in other sectors.

In the UK we also have a now aging infrastructure, much of which was installed during the '60s. We want new wind farms, need new power stations, ever more reliable connectrivity, greener energy, smart metering... all of this needs to be paid for.

Maybe we should nationalise the utility companies AND the banks and get one to subsidise the other!

Originally Posted by Tali

Not many suppliers actually enforce this rule. Nor do you have to wait for one change to complete before initiating the next. Serial changers are more likely to experience difficulties though because of the complicated processes that have been imposed.




So do many other companies. Virgin Media, mobile phone companies, insurance companies, car break down services... The list goes on.

As for profits, all companies have to make a profit. I am told that energy companies profit margin is around 5% and that the profits they make are not excessive when compared to similarly sized companies in other sectors.

In the UK we also have a now aging infrastructure, much of which was installed during the '60s. We want new wind farms, need new power stations, ever more reliable connectrivity, greener energy, smart metering... all of this needs to be paid for.

Maybe we should nationalise the utility companies AND the banks and get one to subsidise the other!

You haven't addressed the complaint the Ofgen have mentioned about the slow response to reduce prices when fuel prices reduce at wholesale but the utilities are even speedier at raising prices when wholesale goes up..

[Osem]

With quangos in the spotlight, maybe Ofgem's feeling the need to justify its existence at last.....

[danielf]

It seems very clear to me that the forest of tariffs is designed to make it impossible to judge competitor's offers. With all the bands and different unit prices available it's virtually impossible to judge whether switching will result in a saving (unless you put your actual usage into a site like uswitch).

I also hate how our Energy provider (Eon) only informs you of new tariffs, and not the old ones, so you can only work out by what percentage they increase by going back to old bills if you have them.

I think there may be a case for forcing suppliers to provide a statement for what an 'average' fuel bill would be. I'm sure they'd find ways to fiddle it though...

Regarding lock-ins. I've just signed up to a year long deal (variable price, online management) which guarantees to be at least 6% cheaper than Eon's next cheapest offer. There's a £30 penalty if I leave before the year's up. This doesn't seem to bad considering the estimated £140 saving over the current tariff.

[Mick Fisher]

On paper the whole Privatisation idea was made to look like a good deal for joe public but over the years the regulatory side of it has been allowed to soften to the point where it seems most are more interested in cosying up to the bodies they are supposed to be regulating.

Of all these rogue regulators the worst appear to be OFCOM, the Energy Reglator and of course The Financial Services Authority. All of whom are only rarely roused and only appear to give lip service to the most blatently outrageous excesses. Lets not forget the 'up to' scam and the 'unlimited' scam from ISP's or the equally blatent and outrageous price 'fixing' by the power suppliers. All of which have been given the green light in the past or else erring Companies have been encouraged to operate a 'voluntery code of practise'.

[j52c]

Originally Posted by mertle

so much for privatasation drives competition and costs down. Every one of these utilities have raked in millions. Have we really seen any benefits.

Another legacy of thatcher ruining the country so rich chums make millions.

Should scrap the privasation of utilities bring it into national fold.

Ofgem is powderpuff and largely powerless.

Another reason why the changes the Conservatives want to make to the NHS should not go ahead.

[Tali]

You haven't addressed the complaint the Ofgen have mentioned about the slow response to reduce prices when fuel prices reduce at wholesale but the utilities are even speedier at raising prices when wholesale goes up

I don't know enough about that to comment, other than to say the way the distribution system is balanced, and the way energy is traded, doesn't make this easy to understand. The delay (if there is one) could be down to many factors and may vary from supplier to supplier depending how far in advance they contracted for the energy they bought and whether it actually ended up being too much or too little on the day. But I don't know enough about this process to answer confidently.

Originally Posted by Tali

I don't know enough about that to comment, other than to say the way the distribution system is balanced, and the way energy is traded, doesn't make this easy to understand. The delay (if there is one) could be down to many factors and may vary from supplier to supplier depending how far in advance they contracted for the energy they bought and whether it actually ended up being too much or too little on the day. But I don't know enough about this process to answer confidently.

There is a delay and you know there is one..and surely if what you are suggesting is true then it should apply to the time scale in relation to the price increases as well.

Frankly the fact that the average customer needs the equivalent of a PHD to understand the differing tariffs within a particular company let alone with a different supplier needs some serious attention.It smacks of obfuscation and does prevent comparison of like with like.It certainly seems deliberate.

I was never impressed with British Gas/Electric when it was publicly owned but I'm not impressed with them as a private concern either.

[Tali]

if what you are suggesting is true then it should apply to the time scale in relation to the price increases as well

Yes, there is a delay. The way I would expect it to work is that when the price spikes, the suppliers protect the consumers from those spikes. But the supplier will benefit when the price drops by not passing on the full amount of the reduction, thus smoothing the price that is paid. Without seeing the actual data involved I can't comment whether this is the case or not but I do feel that the case the media puts forward is sometimes skewed to make the story sound more sensational.

Frankly the fact that the average customer needs the equivalent of a PHD to understand the differing tariffs within a particular company let alone with a different supplier needs some serious attention.It smacks of obfuscation and does prevent comparison of like with like.It certainly seems deliberate.

You are absolutely right. The tariffs available do seem overly complex. Whether this is intentional or not, I don't know.

I'm not sure whether a single tariff going forward is the answer either. Are OFGEM propsing just ONE tariff per type? What about customers on Economy 7 tariffs? What about customers not on E7 tariffs? What about region specific tariffs (Heatwise, E10, Split E10)? All these different tariffs do have benefits for each customer, but at the same time add complexity.

[Mick Fisher]

I guess we have to assume that our energy purveyors are so incompetant that the minute wholesale prices increase, they immediately stock up at the higher price and have to pass on the increase to the consumer.

However record profit margins, year in year out, suggest our energy purveyers are highly competent at stocking up at lower prices while keeping the price to the consumer artificially high.

Throwing a sop to the angry mob for a few summer months when demand is lowest doesn't impress me in the slightest.

As for competition, well, your only choice is who you pick to rip you off.

If I didn't know full well that such practices didn't go on in a civilised democracy I would swear there was some sort of cartel in operation.