Not content to let the odious Chris “need for speed” Huhne to tell the proletariat to switch suppliers, Cameron weighs in on the same theme too.
The trouble with the UK energy market is that the Big Six do their damnedest to make their pricing conditional, obscure and impenetrable, they’ve also put in perverse misincentives to save energy.
Forget switching. You want to know the cheapest way to save on the electricity bill? It would be to join forces with your adjacent contiguous neighbours and have two drop service and share the remaining connection. No I haven’t told you how to implement it because though it’s easy enough to do this sort of information is highly dangerous in the wrong hands. And do bear in mind that adjacent houses are often fed from alternate phases, which might give you concern on maintaining earth integrity with PME installs, among all the other things that could go wrong 😉 The energy companies Ts & Cs usually disallow this sort of thing explicitly, by the way.
The reason this would work is that you are charged a standing charge per connection, either explicitly or obfuscated as a higher cost for the first few hundred units you use. Not only is that ripping you off, it is a major disincentive to reducing energy costs. I get charged a standing charge of over one unit of electricity a day – my usage is about three a day so a quarter of my bill is standing charge.
There are other perversities in the energy market. For no good reason suppliers churn the rates every year, with the aim of shifting their customers onto the expensive standard rate while being able to offer new customers incentives. Combining the two fuels gives them more freedom to hike prices without being too obvious. Sometime they will tell you they have heroically held one fuel price, in which case you can be pretty damn sure the other fuel has been jacked up to compensate. And check the standing charge, or the usage breakpoints, all good places to hide bad news.
I have used EDF for a year. They wrote me they are going to hike charges, so I entered my usage into uswitch, and lo and behold I could save £80 relative to the new cost with a bunch of suppliers. One of which was EDF, surprise. So I rang them up, lost half an hour of my life to get through to switch to the quoted tariff. Punks. It’s like with insurance, every damn year you have to go to something like confused.com just to get the price back to what it was last year.
Sharing services across households would work with broadband service, and Sky (using the second box option, though both have to be connected to the same phone line) which are easier to share with your neighbours 😉
Anyway, back to Mr Need for Speed, who tells use we should switch more. Well, yes, maybe, but perhaps it is the job of Government to regulate so that all providers have to couch their offers in comparable language, and not churn their prices? You have to give an equivalent APR for loans, so how about all firms having to give an equivalent annual cost for electricity and gas for low, average and high usages, as defined by Ofgem?
While we’re on the subject of transparency, Mr Huhne, it is disingenuous to say
No government can control volatile world energy prices
without adding
But the government has decided to add 7% to your bill in green energy taxes
Now green energy may well be a good thing, after all Peak Oil may make that 7% a worthwhile investment. However, blaming the price rises on the devaluation of the pound and world energy prices without acknowledging that a fair amount of the hike was the result of deliberate government policy is disingenuous. Our Chris then goes for the cuddle factor to soften the blow, telling us
We have also increased the electricity bill discounts available for the fuel poor by two-thirds, guaranteeing £120 off their bills to more than 600,000 of our most vulnerable pensioners.
Well, yes, Chris, but since you were part of making some of these guys fuel poor by adding to their bills, and these discounts don’t come from your back pocket or the Fairness Fairy, I get to take a second shafting as my bills go up proportionally more to pay for the discounts, and for other people’s solar panels and feed in tariffs. Cheers, Chris, have one on me, mate.
Now energy is going to be a major pain in future, and I’m happy to tell Chris that I am not paying proportionally anywhere near my fair share for his impoverished pensioners, feed in tariffs and damned wind turbines because I have attacked my power usage and I am in the process of reducing my heating bill by using the low-tech alternative of wood, so he can take his renewables tax and stick it where the sun doesn’t shine. Energy costs are going to keep an awful lot of people in wage slavery in the years to come, and reducing costs by gaining control of the means of production is my preferred approach to independence, from rapacious energy suppliers, misguided Liberal Democrats with a disdain for the proletariat and Russian gas disputes.
I might as well save some of my ire for Dave CamerHuhne, who delivers himself of this priceless quote
We can’t control volatile world energy prices. But we can still help people get their bills down.
No you can’t mate. The best they can do is keep the bills about the same. Not only has your buddy Mervyn King devalued the currency with extreme prejudice and intent to do more, which makes imports dearer, but gas and electricity have more than doubled in unit cost in recent times. I have dropped my usage by a third, but I can’t reduce my gas bills of late. All that is happening is mine goes up by less than most people’s. I’ve managed to press my case a lot better with electricity, but there is more you can change there.
Simple Living In Somerset 
Now here’s a funny thing. I switched from EDF to British Gas about 15 months ago using USwitch. British Gas sent me an email advising me that EDF will ring me up to stop me switching, but that the deal they would offer would not be as good as the British Gas one. Right on both counts.
So, I go onto British Gas with the Web Saver 8 tariff and for a few months am a happy bunny. Then all the recent rises kick in and my Web Saver 8 tariff expires. However, unlike EDF, they emailed me to recommend their new “low cost” tariff, Web Saver 13. Yup, the marketing churn is such that over the course of a year they’ve had five different tariffs.
Unless you are prepared to switch every few weeks you are unlikely to be on the best energy rate.
The issue you raise about standing charge/primary and secondary consumption rates is, of course, completely to the point. But, for me, with an instrinsically higher annual consumption level and no cheap way to substantially reduce it (24 MWh gas, 3.2 MWh power) a simple PAYG system would not be advantageous and might even be worse.
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So many scams, so few ways to avoid them. I think going for “old renewable”, wood, is probably your best heating solution. Hope you have a state-of-the-art, air-tight, baffled wood stove. Scandinavia makes the best. I survived once on a leaky cast-iron Sears special, but most of my wood came cheap (free), and I used to bank up the stove with coal ( also free ) overnight, which can be dangerous due to creasote build-up. Anyway, it really gets ridiculous the way in which government and the private sector exploit us for the necessities of life. I think any alternative is better than supporting the status quo. Keep the home fires burning !
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@SG looks like you are pretty close to Mr Average who runs 3300:20500 kWh pa. Much of my grouse here is the deliberate price obfuscation. The regulator could do well to make the companies quote a rate for low, medium and high usages, low being 1/2 of average and high being twice, in the same way as lenders have to cite equivalent APR. Sadly few consumers in the UK have the education to be able to wrangle kWh though at least now bills seem to include an annual statement of usage. So on that they can be informed whether they are L, M or H. Sometimes there will be a reason, an all electric household would be H 🙂 Given that information you could qualify the offering from the energy firms at a glance, rather than relying on the computations behind uswitch etc. Companies would probably always target higher users with better deals – after all this is what capitalism does! If the government really wants us to reduce power usage then they’ll probably have to renationalise, there’s no future in a private firm aiming to sell less of what they make.
FWIW when I moved to EOn to EDF the same sort of counter-offer came, this is probably an industry-wide policy. It is possible that EDF didn’t tell me of better offers because I’ve opted out of junk mail.
@g I looked at efficiency when choosing the stove, mine is an Island 1 which works well for us at a rated efficiency of over 70%. We use wood from the farm hedgerows, replacing the gaps and indeed infilling some. On the field the Italian Alder windbreaks will yield some firewood every year too. We also get given wood which we chainsaw to usable sizes, and have about 1/5 acre of biomass willow growing on another site. So as you say, we aim to get some independence on the energy front – I run at about 2/3 the UK average gas usage, and if I can push that down to 1/2 or 1/3 then this will be good.
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The time is coming again when every time you go for a walk with the children that all of you gather an armload of wood from broken branches, dead trees, hedges, etc. I remember smiling once when one of the children came home from a friends place dragging a very dry branch some 15 feet long behind him. I trained him well. Every bit helps when you want to keep warm.
Shawls around the shoulders and knee rugs will also become more common.
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I thought this was a pretty lame excuse for a policy, too, especially as we know they know about peak oil now since the set up the Working Group….) I wonder if the govt are just playing a ‘don’t scare the horses’ or ‘pas devant les enfants’ scenario? Because if they were to get REAL about energy policy it would scare the horses.
When they say things like: “We can’t control volatile world energy prices” what they really mean is ‘There’s a sh..storm coming.’
Advising people to switch is all well and good, but it’s on a par with putting on a paper hat to protect yourself in a collapsing building.
Now, I’m not absolving the Big 6 of any gouging or deviousness, in fact, I’m sure they’re up to their collective necks in it. The whole market as it is run in the UK enables that sort of behaviour, and as much as I’d like to see transparent tariffs that of itself won’t break the effective cartel. Part of what looks wrong to me is the way the Big 6 are both generators and retailers, mediating the wholesale prices by buying and selling to themselves.
If I was to be radical, I’d suggest something like stripping them of their retail operations, and tranferring ALL of that to the National Grid. That way the NG would be sole retailer and sole buyer of wholesale electricity, and the generators would have to compete to sell into the pool. They would lose their cartel capacity, and it would operate more like a proper free market. Some might even suggest nationalising NG to do this, but I’m sure it could work in private hands under this model.*
Personally, I’ve switched once in the past few years, and no longer have any dealings with any of the Big 6. I use Green Energy for electricity and Ebico for gas. Ebico is the last word in transparency and simplicity – a single tariff with no standing charge, no payment method discounts/discrimination and no ‘quantity breaks’. You pay only for what you use so there’s always a marginal incentive to save energy. There may be cheaper tariffs around, I really haven’t checked since, but as a low user I don’t sweat it. Gas is around 3700kWh over the past 12 months, electricity 760kWh, so I guess that’s about 1/5th of Mr Average.
I’m envious of those wood burners, I’m looking for a way to get one fitted here…. 🙂
* Macs declares owning shares in NG and would be mighty peeved were it nationalised 😉
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