A number of the Big Six have suddenly and spontaneously decided that they’re going to change the way their charge us for energy. Remarkably, and in no way related, this happens on the same day the Government said it would be looking at ways to make energy cheaper for all.
This has nothing to do with certain companies announcing that price rises were the fault of the government’s green levies and that, if they weren’t such a bunch of dreadful hippies, they’d probably heat our homes for free. Nothing at all.
Of course, npower recently upped their bills by 10% and then swiftly announced that they would put a freeze on that until 2015. British Gas, meanwhile, said they would actually drop prices in 2014 after SSE said they’d be doing the same. A price drop isn’t much use after you’ve been putting your prices up hugely for months at a time.
Either way, the government has designed a fund that gives a rebate to electricity customers and the chief executive of npower, Paul Massara, said: “We welcome today’s announcement as an important step in cutting energy costs for our domestic customers. As a result of this announcement we will reduce our bills. We are currently calculating how large this reduction will be, and can assure our customers that it will fully reflect the reduction in the costs to our business.”
However, there’s a catch. He continued: ”We don’t plan to increase energy prices before Spring 2015, unless there are increases in wholesale energy costs or network charges.”
In a statement, SSE chipped in, saying: “On the basis of today’s announcement and the planned consultation, SSE plans to reduce its household energy prices before the end of its financial year. The overall impact of the proposed changes, including the rebate which is expected to apply in Autumn 2014, should lead to a typical dual fuel customer benefiting by around 4%. This should equate to a saving of around £50 for a typical dual fuel customer”
The government are having rings run round them and we’ll have to pay for our energy regardless. How marvellous.
So the Government don’t want the energy companies to freeze prices but the opposition do? While the politicians wrangle over the best political leverage, ordinary householders are more concerned about paying their bills and keeping warm. Good job the weatherman was right about those massive November snowdrifts then. But as we move into the coldest season, is fixing energy prices the right way to go and what are the best deals? If you don’t fix, what might happen to your bills?
Part of the problem with this winter’s impending bills is the fact that most of the ‘Big Six’ energy companies have recently increased their tariffs just in time to reap the maximum profit out of their cold customers- to date Eon is the only one of the six to have not yet announced a rise. However, there are some fixed deals available that can guarantee that prices won’t rise (again) for 12-18 months- or even into 2016. But is fixing the way to go?
If you are currently on a named tariff you may be getting a ‘discount’ from the suppliers standard prices, but this doesn’t mean that prices can’t rise and they generally will rise in line with headline prices. Much like a fixed rate mortgage deal, fixed rate energy prices will not go up for the duration of the fix, although bills may change depending on your usage. However, assuming you use a similar amount of energy as last year, or less if you switch to energy saving lightbulbs (!), you can estimate how much your bill is going to be in advance, with no nasty price rises.
However, fixed prices may be higher than variable prices- according to Which some fixes could be up to 20% higher, as a premium to be sure you won’t face unexpected rises. There will normally be a penalty fee should you wish to switch out of a fix before the end of the fix period, although many suppliers also charge a penalty for switching out within a defined period, often a year, even without fixed prices. Finally, if prices go down, as everyone earnestly hopes*, if you have fixed, you won’t benefit from the drop.
But note that, if you are with one of the raised price Big Six, even 20% higher prices from a competitor might end up being cheaper. Which! investigated the market and came up with a list of the top five fixed rate switches, all from Eon and OVO who have, so far, not raised prices.
Based on an ‘average’ bill, the top five come in as:
Eon Energy Fixed 1 Year (online version) v5 – £1,167.63
Eon Age UK Energy Fixed 1 Year (online version) v5 – £1,167.63
Ovo Energy New Energy Fixed + Ovo Just Reward – £1,175.38
Eon Energy Fixed 1 Year (offline version) v5 – £1,178.13
Eon Age UK Energy Fixed 1 Year (offline version) v5 – £1,178.13
Unfortunately, two of this top five are only available to those over 65, so to add to the list, First Utility are offering longer fixes for those who like long term peace of mind, with offerings fixed until June 2015 or even into January 2016, although the rate increases for the longer fix. Still based on the Government’s negotiations with EDF, it could still be a great deal given anticipated price rises in the next 2 and a bit years.
If you don’t want to fix, and are happy to surf the variable rates, top of most comparison tables is relative unknown Spark Energy’s Spark Advance 2, cheapest at £1,116.41 a year.
*but no one believes will actually happen
It turns out that the Government hasn’t actually asked the Big Six energy companies to freeze prices, despite rumours that ministers had been pressuring them to fix prices until the 2015 election.
‘This story is utterly misleading.’ snapped a snippy Tory source, ‘The Government has not asked for a price freeze. People should wait for us to announce our plans.’
(Yes, we will wait. Wrapped in blankets, coughing. Whatever you say, guv.)
Meanwhile Energy minister Ed Davey has promised make changes to the green levies for businesses, which the government have vaguely said they wanted to ‘roll back.’ This refers to the ECO scheme (which one Tory referred to as ‘green crap’). But nobody knows what the rollback entails, and no energy companies have agreed anything just yet.
But some of the Big Six have said they would cut prices if the government actually got its act together. Npower issued a statement saying: “If the green levies are rolled back then Npower will cut prices to its customers as soon as possible. We need to understand the detail of the roll back before we can comment further.’
There will be an announcement of their plans in the Autumn Statement on December 5th. But there doesn’t look like there’ll be a price freeze. After all, that would be too CARING. Looks like the only things that will be frozen are the icicles on our dead noses.
Energy bills are still big news. And getting bigger. With energy companies now being blamed for contributing to a rise in the number of ‘extra’ deaths in the winter of 2012/13, where people are actually dying of the cold, is it any wonder that responsible energy companies are doing all they can to cut costs?
Following on from earlier announcements, Npower have now confirmed that 1,460 jobs (out of a current total of 9,600) in the UK are to be axed as part of cost saving measures, that also included the sale of 770,000 customers to Utility Warehouse. The jobs will be lost in Stoke on Trent, Oldbury, Leeds and Sunderland.
In a statement, Npower said: “As we announced a couple of months ago, Npower has been undertaking a major review of sites, operations and people across the UK. We’ve been doing this to improve our customer service and keep our costs down, at a time of external pressures on customers’ bills.” So what it looks like is that we said we wanted lower energy bills, Npower has listened to our concerns, and is taking action to help deliver this, right?
Perhaps. The statement actually talks about reducing costs, not reducing bills, and comes off the back of Npower owner, German energy company RWE tutting over a 3% fall in Npower’s operating profits to a piddling £176m (206m euros) in the first half of 2013. While certainly undertaken “at a time of…pressures on bills”, this cost-cutting move is more likely to benefit shareholders than householders.
Lets just say we’re not holding our breath in the hope of lower Npower bills despite the massive money-saving job cull. Merry Christmas folks.
David Cameron has, apparently said that the Government have got to “get rid of all the green crap” in relation to green levies. It seems pressure from The Big Six energy companies has worked, after they complained/guilt-tripped Downing Street with price hikes brought on by environmental policies.
While everyone else is guffawing about U-turns in policies (Tories have said ‘Vote Blue, Go Green’), the rest of us are wondering if we’ll actually see our bills go down now?
Jumping to his pal’s defence on LBC radio, Nick Clegg said: “It is worth remembering that a lot of the policies that we have got support tens of thousands of people who work in the booming green energy sector, actually keep bills down in the long run because if you don’t insulate people’s homes today they are going to be spending more on their gas and electricity bills in the future heating their homes.”
Last month, Cameron told the House of Commons he wanted to “roll back” green levies, because he’s presumably aware that they’ve added (on average) £112 a year to household energy bills.
Historically, companies have put bills up and then crowed about price freezes, even though they sit in an inflated state. The same will invariably happen in 2014 if green levies are put on hold for a while. However, pressure is growing for an actual reduction in price from customers, but whether The Big Six will listen (or in fact, need to listen, such is their clout in the sector) is another matter.
Cameron may still say he’s serious about the environment, but if he’s serious about getting the public affordable energy bills, he might want to have a look at giving Ofgem a bit more muscle so they can fight our corner.
Don’t hold your breath.
With energy companies about as popular as herpes, it takes a real suppurating pustule to top the complaints table. And that boil on the face of society is Npower, who ran up 202 complaints per 100,000 customers between April and June of this year – five times more than SSE, who boasted the best customer service.
The data, which was compiled by Consumer Futures before the energy price rises, showed that EDF Energy were the second worst with 75 complaints per 100,000 customers. Third was E.On with 60, and just behind that was British Gas with 55.
Roger (Ass)Hattam, domestic retail director at NPower, did some groveling in reply to the news, saying:
‘We know that some of our customers have not had the service they deserve. We’ve had some challenges with a new computer system and we are sorry that this has caused problems for customers.’
Is this the same ‘computer system’ that hiked up NPower’s winter prices by a record beating 10.5%?
With the highest price rise of them all, it looks like NPower will be topping the customer complaints chart for many years to come…
The National Audit Office has warned us all that energy bills could rise by around 50% over the next six years, outstripping inflation and basically leaving everyone in a position where no-one can afford to pay for it.
The NAO says in a report: ”The available projections suggest that increases in both energy and water bills will continue to outstrip inflation, on average, up to 2030.”
Angela Knight, chief executive for Energy UK, said that new research shows that energy prices could rise by 46% in the lead up to 2020. So, in short, from 2004, that means that prices will increase by 260%. By 2020, bills could be over £2,000.
Knight said: “The industry has become a lightning conductor for the general concern about the cost of living. As a result we stand accused for things that we do, for things that we don’t do, for things that we are responsible for and things that we are not … this is not an understood industry.”
Understood or not, we all know that prices are going up more sharply than wage increases and that any lack of transparency in the sector isn’t our fault. Bill prices haven’t been justified or explained and no-one seems to be doing anything about it, even though it looks like certain companies are indulging in flagrant blackmailing of the government by threatening further price rises if green levvies don’t change.
The NAO is recommending that the Treasury needs to publish the expected overall impact on our bills in a bid to promote transparency. Amyas Morse, head of the National Audit Office, said: “Government and regulators do not know the overall impact of planned infrastructure on future consumer utility bills, or whether households, especially those on low incomes, will be able to afford to pay them. It seems critical to know ‘how much is too much’, based on reliable information.”
They’ve done this by announcing a winter price rise on gas and electricity of 3.9%, which is smaller than the other companies, but still a rise. In money, it is a rise of around £50 a year. However, they’re threatening to push bills up further and, like other firms have being doing recently, they’re pointing squarely at the government and their green policies.
In statement EDF said: “If the Government makes bigger changes to the cost of its social and environmental schemes than EDF Energy has anticipated, the company pledges to pass these savings onto customers.”
“However, if changes to social and environmental programmes are less than anticipated, the company may have to review its standard variable prices again.”
Of course, this threat seems a bit rich considering that EDF recently landed a huge deal with the government to build a massive nuclear power plant in Somerset. They’re complaining about green levies when they’ve got a guaranteed share in an £80 billion revenue in the coming years.
EDF chief, Vincent de Rivaz, says: “The best way to help customers is for us to keep our prices as low as possible. I know that price rises are always unwelcome, but we have taken the first step to show what can be done if rising costs are tackled head-on. Energy firms, politicians and consumer groups need to be part of the solution and stand on the side of customers to give them energy at an affordable price.”
With a snowy November forecast, but raging energy prices, there might just be a few people this year who are more worried about keeping warm, than paying for Christmas. However, things might not be so dire as they seem.
Most people have heard of the winter fuel payment, which was introduced to stop pensioners freezing, and everyone old enough can get between £100 and £300 tax free to help them put the heating on. Interestingly, however, you can claim winter fuel allowance for 2013/14 if you were born on or before 5 January 1952, which means you could only be 61 and get the free money. If you are over 65 (or slightly younger in the case of women) you will automatically receive the payment, usually by Christmas. However, if you are not receiving state pension (or some other benefits) you can still get the cash provided you normally live (and were not in prison or long-term hospital care) during the week of 16-22 September and you make a claim. No claim, could mean no cash.
However, if you aren’t lucky enough to be over 60, you could still get some help towards those enormous bills. Where the average temperature drops, or is forecast to be freezing or below for seven consecutive days between 1 November and 31 March, eligible people can claim £25 per week. Those eligible for this cold weather payment are normally those claiming certain benefits, including income support or pension credit and again, will normally be paid along with any benefits receivable. If you do qualify but are not currently receiving money you may need to make a claim.
There is also a handy checking tool which will tell you if you can expect any £25 bonuses based on the weather in your postcode. November hasn’t been cold enough yet (even in northern Aberdeen), but as the month goes on, this may very well be a welcome (warm) helping hand for families.
Just imagine if you were one of the 500 FlyBe staff imminently losing their jobs- you or someone you know might be very glad to know those receiving jobseekers or ESA will also qualify.
In a joint statement, Ofgem and the Financial Conduct Authority (FCA) said: ”It has been concluded that no evidence of the alleged market manipulation could be found and therefore that the interests of consumers have not been harmed.”
This all came about after independent energy pricing house ICIS Heren stated that “traders submitted erroneous bids and offers to skew the end-of-day price of a key gas contract.”
Ofgem said they’d looked into the allegations but said they were satisfied with evidence provided to them explained that market movements and transactions were not improper. ”These explanations are credible and no evidence was found which disputes the explanations provided,” Ofgem said. ”In light of this, it is considered that no further action is required in connection with the allegations relating to 28 September, 2012.”
It wasn’t too long ago that a number of banks were involved in a price fixing scandal, to which some huge fines are being handed out. The European Commission is also still investigating individuals at a number of firms for potential oil market abuse, with Shell, BP, Platts and Norway’s Statoil having their offices raided by the EC.
Something tells us this isn’t over.
The Big Six energy companies are in a BAD MOOD recently – they can feel the threat of getting their £2million a year bonus lollipops taken away from them and they’re about to go into full tantrum mode.
Today, they’re moaning that small energy companies get away with less environmental and social levies than the bigger ones. E.On doesn’t like it. It’s not FAIR. It’s really really absolutely isn’t. Tony Cocker (Cockup) from E.On is very cross indeed, because these levies take up 8% of the average bill. So smaller companies can change less and have an unfair advantage over the big ones.
‘The small companies are exempt from a number of environmental and social obligations,’ he said, his bottom lip wobbling.
Ovo Energy, who sound suspiciously like a feminist theatre group but in actual fact provide gas and electricity, hit back, saying that they were cheaper and naaa naaa neeee naaa naaaa.
‘I can tell you, of the four companies that have raised their prices, we are around £160 cheaper.’ Said Ovo’s Stephen Fitzpatrick. ‘So that’s about 12% to 13% for a customer of average consumption.’
Hmm, could this petty little squabble be an indication that big energy companies are feeling threatened?
Go to your rooms – OR I WILL BANG YOUR HEADS TOGETHER.
A video has appeared online which shows a gaming granny playing GTA V. That’s cool enough as it is, however, in the clip, she goes on a mental and thoroughly wonderful rant against British Gas, getting her revenge on innocents in the game and beating the crap out of them like they put her bills up.
Warning, this video has very, very fruity language.
The lady in question is called Gamergran87 and while punching and beating several pedestrians, setting people on fire and blowing up gas rigs, she shouts things like “SCUM!” and ”20% price hike?! You thieving bastards. Have some of this!” And it is all aimed at British Gas.
Of course, it might not be strictly kosher, but we don’t want to know. Either way, ‘GAS BASTARDS’ needs to make it into everyday language.
Which! are calling on the human void George Osborne to ‘cut the Big Six energy companies down to size.’ They believe the Chancellor for Evil can do more to regulate energy costs and protect consumers when he delivers this year’s Autumn Statement on December 4th.
The consumer watchdog is lobbying George to make the energy suppliers more competitive by increasing competition within the wholesale energy market. With the Big Six whingeing about wholesale prices, Which! believe that generation should be made separate to supply, and that it’s the wholesale market which should be regulated to keep prices low.
They think that suppliers should be held accountable for their costs – Which! have had their calculator out again and they’ve figured out that £200 million could be saved if energy was delivered more efficiently.
They’re also going to badger George to delay the introduction of Smart Meters, which will cost £12 billion to roll out (and let’s face it, nobody really cares) and scrap the carbon floor price, which is meant to be an incentive for low carbon production, but doesn’t actually work. That could save a further £1bn, Which! says.
Richard Lloyd, stripped at the waist and holding a cudgel, said in an open letter to Osborne:
‘When you stand up in the House of Commons I hope you will also be standing up for the millions of hard-pressed consumers who are grappling day-to-day with the realities of rising energy costs by cutting both the Big Six and the cost of government policies down to size.
Cut them down, George.’
(I don’t know about you, but I’m aroused.)
Everyone is more than aware of some of the gasping price hikes concerning our beloved energy companies, with rises in advance of 10% across the board. The Big Six have been throwing their hands up and saying that this isn’t their fault and they’ve had to do it because of increases in wholesale prices.
However, Ofgem have been collating their own figures and it seems that rises in wholesale prices only went up by 1.7% over the last year. If that’s right, prices should’ve gone from £600 to £610.
In addition to that, Ofgem reckon that energy companies’ average net profit margin has more that doubled.
Representatives from each of these woeful companies are going to face MPs in Westminster this week for a grilling (if the country can still afford to grill things). Energy minister, Greg Barker, is going to throw down the gauntlet to the energy companies to see if they’ll return the millions customers have spent thanks to overpaid bills through direct debits. If not, fines could be issued.
He said: “With more hardworking people switching to direct debit to get the best deal on their energy bills, it is vital that they aren’t being unknowingly ripped off. The better energy companies will now automatically refund your cash if you build up more money than required to meet your normal bill or will pay you interest if you are in surplus. However, it looks like some companies aren’t doing that.”
Someone’s taking the piss.
Scottish Power had to confess that they had indeed, been luring customers with made-up or unreliable comparisons. Ofgem weren’t happy that Scottish Power’s door-to-door sales and telemarketing campaigns basically talked a load of cobblers when estimating household consumption and comparing their products to their rivals. Seems that these salesfolk weren’t ‘adequately monitored’ or trained either.
“While there is no evidence that the contraventions were deliberate or wilful, the contravention cannot be regarded as accidental or inadvertent,” the regulator said.
Scottish Power chief executive Neil Clitheroe apologised “unreservedly”, adding that they’d implemented new controls since the investigation started but will now be paying a nominal fine of just £1. On top of that they’ll be paying out £7.5m in payouts (of at least £50 to each household) in fuel poverty on the Warm Homes Discount Scheme and a further £1m will go to those who fell foul of mis-selling. They’ll have to apply and they’ll get somewhere between £5 and £30.
Of course, it seems that mis-selling is part of the energy companies culture at the moment and with customers increasingly confused by tariffs and the like, once they’re signed up, they’re not likely to move elsewhere. Even customers who do shop around are still looking at a group of companies that are arbitrarily putting energy bills up by eye-watering amounts anyway.
The whole thing stinks basically.