Tariff systems of Byzantine complexity seem to be the fashionable way of cheating consumers. Anyone using the railways will be in little doubt that there’s something dodgy going on. It’s something New Labour failed to tackle, I wonder whether the tories will be forced to? I’d like to see regulations requiring clear, simple pricing structures.

The utter uselessness of simply telling consumers to shop around emphasises Huhne’s inadequacy.

The biggest thing he could do would be to scrap the ridiculous subsidy we pay for green energy, and stop building pointless windmills which need gas fired power stations running at 90% capacity behind them in case the wind stops. They do nothing for the environment except damage it, and they push the cost of electricity up.

A large number of homes cannot be fitted with insulation because of the nature of their construction. It is pointless to fit cavity wall and loft insulation to homes where the windows are rotten or the seals have failed. Replacement of windows with high spec double or triple glazing with the highest spec of thermally efficient glass should be included in a programme of insulation. Even then some airflow is necessary for people and the building to breathe. Failure to adequately heat homes causes condensation, dampness and black mould which is bad for the health of the occupants and the building. This country has a hell of a lot of weather from around -35C in winter to around +40C in summer, with wind, rain, hail, snow and just about anything else that can be imagined but becasue none of it lasts for very long buildings are poorly made to cope with any of it. All new homes should have the highest level of insulation as standard and buildings that cannot be retrofitted should be replaced. Fat chance while its in the energy companies’ financial interest to sell more.

Switching providers works a bit like this:

Each company has about 50-100 tariffs, of which a small number are at a low price at any time.

If you switch to a low tariff, six months later you will be notified that the price is being retrospectively raised from a couple of months after you switched. Or sometimes it happens without you being notified.

It’s a totally obvious fraud and would result in immediate arrest and imprisonment if carried out by anyone other than a big company.

I’m not sure why energy companies aren’t obliged to ensure you are on the cheapest tariff, for your usage, at all times. I’m also surprised energy companies don’t operate under a regulated return on capital regime or similar – I thought they were – in which case all this talk about profiteering should go away: the profit would reflect how much they invest.

“. I’m also surprised energy companies don’t operate under a regulated return on capital regime ”

Its amazing what donations to a political party will get you

@ Schmidt Great point. Windows should definately be subsidised. There are cheaper option that make a real difference for older properties http://www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-11759023 Blinds seem to make a lot of difference.

@Tyler Not really sure that’s a viable solution. Oil and gas prices are only going to get higher (as a general trend) so investment in renewables is in effect not only good for the planet but probably the most important energy security policy today. not only that but green policies only accounted for (this is form memory and can’t find a link so apologies if i’m wrong) less than 10% (think it might have been 5%) of recent energy cost rises. The rest made up of Oil and Gas price rises and profits. So go green, fix the market seems to be the only way out.

@chasbooth pointed out that the link for uk/swedish energy use was broken. here it is: http://data.worldbank.org/indicator/EG.USE.PCAP.KG.OE
Sorry about that.

@OP
With regards to point 1 on the list:

This is already happening. Electricity going into your house comes from the national grid. Your energy company buys that electricity from the grid in order to sell it to your house. Now, an energy company might also own power plants selling electricity to the grid, but all that means is that the money goes round in a big loop, not that smaller companies are unable to enter the market through inability to buy electricity to sell.

@6

Are the Big 6 donating to the Lib Dems then? It wouldn’t seem to be the case as they’re not on the list of donors and nor do the Lib Dems have the kind of money to spend which would come from big companies. Maybe factcheck before making allusions to corruption?

P.S. Full disclosure: the Lib Dems do have a partnership with one energy company called “Good Energy”. That is to say, the Lib Dems have a section on their website where they recomment members to use Good Energy and say that by doing so the Lib Dems also benefit because they get a referral fee.

The biggest thing he could do would be to scrap the ridiculous subsidy we pay for green energy

Shows how little you know. Subsidy for nuclear energy is much greater.

“Are the Big 6 donating to the Lib Dems then? ”

Probably not, it would be a waste of their money.

I was alluding to the main two parties anyway. Don’t take everything as a personal comment on your own particular tribe.

“Check, Switch, Insulate” does nothing”…for people in shared houses, because Landlords are not paying the bills. Landlord permission shouldn’t be necessary for homes to be brought up the Warm Homes standard. More, contract clauses which stop you changing gas/electric suppliers or tarrifs “(to avoid issues”, he says) should be null and void.

Moreover, top-up meters should NOT have separate tariffs. They should only be allowed to charge a *small* premium for the infrastructure. People with them should be able to select from the standard array of tariffs. (You’re already hammered by the loss of the direct debit discount!)

As it is, we won’t be using the heating here this winter. We can’t afford to. This in turn deflates the “fuel poverty” statistics, because we’re not spending the money…

The problem is there is no real market.

A cartel has been allowed to develop, by government, through mergers and acquisitions and they are now protected by them.

This cartel is allegedly regulated by the appalling Ofgem, ostensibly in the interests of consumers but, in reality, to ensure that the government machine gets its cut from the excess profits.

The sector represents the worst kind of state capitalism.

@13 – Er, no. The problem is the capital investment needed to compete. Which is not the same as state capitalist.

Water, which *is* still very much state-capitalist, has risen FAR more moderately (and in some cases because of legislation, i.e. ~£10/year because they’ve taken on responsibility for extra drains leading off people’s property)

“This in turn deflates the “fuel poverty” statistics, because we’re not spending the money”

Just a technical point, they measure this not through actual amount spent – but through modelling how much a typical household would have to spent to meet WHO defanitions of adequete heating, hence people who simply turn the heating off are still included in the stats.

@Pagar, prices went down between 1999 and 2006 following the creation of meaningful competition that allowed consumers to switch suppliers. The recent price rises have more to do with issues of supply, although I accept that consumers need to have more and better information, and energy companies have been misleading.

@15 – The model is on those *spending* the money. I know someone involved, and they ARE dropping people off the lower end for that. They want to introduce a NEW model for people without utilities for financial reasons.

And issues of supply? Yea, right.

@16 – considering I’ve worked on the models used by DECC myself, I can assure you that people not consuming is accounted for.

And issues of supply – easily proved by looking at global energy prices over the last few years.

@8. George W. Potter

You’re right. That is exactly what happens. but a few points on why it isn’t an “open market”.
1. Existing Energy companies receive massive subsidies from government. New companies don’t making it almost impossible for them to enter the market.
2. Companies that sell energy are owned by the same people that buy them. (for retail not trade i.e. national grid) In most other buiseness settings that would be seen as a conflict of interest. If they can push up per unit prices as they sell them to the grid they can force higher prices
3.A lot of the subsidies for energy companies are at the generating end meaning if companies generate and sell energy at retail it will be almost impossible for small companies to enter the market let alone compete without massive capital backing them but even then….

I maybe should have been clearer in meaning that energy companies should be forced to sell energy to smaller companies. But what we have just now is not an open market.

Been talking about thsi ontwitter and it was rightly pointed out that the link i provided for uk/swedish energy use wasn’t for households. Closest I can find is domestic energy and it shows sweden uses more domestic energy per capita.
http://earthtrends.wri.org/searchable_db/index.php?theme=6&variable_ID=634&action=select_countries

go to regions>Europe>get all country data for selected region>next

Let me be clear. This does not prove that Sweden wastes more energy (with the u.k.s terrible insulation/energy saving rates that would be very surprising) but uses more. Which is the opposite of what Huhne said. Huhne said Sweden uses less energy.

As mentioned by the OP there are lots of things that the government can do to alleviate the pressure of high energy prices on consumers. What the government can’t do is give us cheap energy unless they intervene directly by subsidising the cost of energy from general taxation for end users. That would be a bad idea because it does not tackle the fundamental problem of our energy use. Since the price of gas relates to the price of oil set on global markets, the government can’t prevent it rising and it is pointless thinking that they can.

The tariffs complexity really is a scandal. When accountants and maths professors can’t work out the best deal is clear evidence to say the least that there are problems around clarity. Something really ought to be done about tiered tariffs. We do not want people to freeze. However, we want them to use less energy by using energy efficiently. When they use energy efficiently tiered tariffs discriminate against them by charging them more for energy as a low user. Therefore, wasteful energy use is rewarded and efficiency punished.

Reduce barriers to entry, more competition in the energy market, clearer tariffs and easier switching are the ways to contain price rises from the supply side. However, there is no getting away from the fact that energy is going to get more expensive and if we want to reduce our costs we must reduce our demand. All the usual things about insulation, better built energy efficient homes, smart meters, renovations to make social housing energy efficient and a hot water bottle for Leon is the way to reduce our energy demand.

This sums it up for me from Sean Richards

“We are not being told the truth

The ruling political class that is in general around the world today seems to spend much of its time subverting the truth and as an example of this let me demonstrate from my own country the UK. Today the UK Prime Minister David Cameron and the Energy Secretary Chris Huhne are attending an energy summit to discuss rising fuel prices. The theme of their intervention is shown below.

We are determined that everything that can be done will be done to help people bring their energy bills down.

A laudable idea you might think. the problem is that it is mainly for show and to demonstrate this let me take you back a year and look at what Energy Secretary Chris Huhne announced then. From the Financial Times and the emphasis is mine.

“However, the government wants the “big six” utilities to spend £200bn on renewing Britain’s entire energy infrastructure over the next decade. The cost of this ambitious scheme to replace lost generating capacity and cut carbon dioxide emissions will be passed on to consumers in the form of higher bills, said analysts.”

If so, future increases in energy charges will be the indirect result of government policy.

Can you see the gap between what they have actually done and what they are saying now? There is a further addition to this is that the main bulk of the price rises that were announced then have yet to impact on energy consumers. The plans were for the period up to 2020 and were if analysed in isolation expected to lead to a considerable rise in energy prices by everyone except for Mr. Huhne who claimed that an expenditure of £200 billion somehow would not have much impact. His ministry produced various estimates of which the central one was for a rise of 22% in gas prices but when challenged to publish the assumptions behind this replied by saying it was “explicitly provisional”. In the UK the price of gas also influences the price of electricity because it is also used to generate electricity.”

This sums it up for me from Sean Richards

“We are not being told the truth

The ruling political class that is in general around the world today seems to spend much of its time subverting the truth and as an example of this let me demonstrate from my own country the UK. Today the UK Prime Minister David Cameron and the Energy Secretary Chris Huhne are attending an energy summit to discuss rising fuel prices. The theme of their intervention is shown below.

We are determined that everything that can be done will be done to help people bring their energy bills down.

A laudable idea you might think. the problem is that it is mainly for show and to demonstrate this let me take you back a year and look at what Energy Secretary Chris Huhne announced then. From the Financial Times and the emphasis is mine.

“However, the government wants the “big six” utilities to spend £200bn on renewing Britain’s entire energy infrastructure over the next decade. The cost of this ambitious scheme to replace lost generating capacity and cut carbon dioxide emissions will be passed on to consumers in the form of higher bills, said analysts”.

If so, future increases in energy charges will be the indirect result of government policy.

Can you see the gap between what they have actually done and what they are saying now? There is a further addition to this is that the main bulk of the price rises that were announced then have yet to impact on energy consumers. The plans were for the period up to 2020 and were if analysed in isolation expected to lead to a considerable rise in energy prices by everyone except for Mr. Huhne who claimed that an expenditure of £200 billion somehow would not have much impact. His ministry produced various estimates of which the central one was for a rise of 22% in gas prices but when challenged to publish the assumptions behind this replied by saying it was “explicitly provisional”. In the UK the price of gas also influences the price of electricity because it is also used to generate electricity.”

Lies lies lies….its all lies I tells ya..

@20. Richard W: “The tariffs complexity really is a scandal. When accountants and maths professors can’t work out the best deal is clear evidence to say the least that there are problems around clarity.”

Agreed, but tariffs are not the only problem. When I pay my bill by direct debit (the only way to escape additional billing charges), I find that I am always in credit. After the coldest winter in five years, my March bill will say +£89.12.

i’m always in credit to my energy supplier. My energy supplier purchases on the futures market. So my £89.12 in March is buying cheap gas/coal/electricity in summer, to be sold to me at a higher rate this winter.

Is there a tariff model that allows me to escape this?

“Reduce barriers to entry, more competition in the energy market…”

I am not convinced by the competition argument, unless a new provider can create a new business model. The current suppliers are doing the same thing, more or less, tweaking the same margins. Alas, the only way that they differentiate is on how “creatively” they manage tariffs.

ps When I have finished knitting my own bed socks, I’ll make some for Leon.

@23 – Yes, a pre-pay meter. Except your bills to double, though.

@20 – So you’d punish the poor, who live together in shared housing, for “higher” energy usage. *claps*

Moreover, there is no such “inevitability”. You’re saying that people in shared rented houses are not worthy of not freezing all winter and that cutting off utilities to poorer areas at peak usage times is great! (“smart” meters, right. Wrap them in foil and stick them at the back of the cabinet…best use for them)

Also, hot water bottle? No, the Kettle is strictly for hot drinks. We can’t waste energy like you can. (Low-energy laptop and one energy saving light bulb before you start carping)

Leon, you are a funny dude the way you make up stuff about other posters.

@25 – Yes, I mean, I actually read their posts! Shocking, I know.

Richard W is a contrary bloke but I don’t think that you would need to twist his arm much. I’m sure that he would agree that rented property should be thermally insulated, per se.

@27 – I don’t. Why should I? I’ve got a load from the right about how I should find somewhere cheaper to live (already in the lowest 10% of the web-advertised properties, despite the fact it’s still technically over the 30% HB margin* by some way – everywhere cheaper I’ve looked has been clearly unfit for human habitation) and the owner’s inviolate rights before.

Never mind that this house, and especially my room, is very cold. I can’t find anywhere cheaper which wouldn’t involve paying mainline train fares to where I work though. (Which would wipe out the difference, and more – I currently get off outside zone 1 and walk into work, which costs me ~6 hours a week, but keeps the cost under control)

*No, I’m not currently claiming it. But the way things are going in this country, I have to plan ahead.