Bust energy suppliers

[BobbyD]

No argument that it could have been done better, and that it's the way it's been done that's made it unsustainable
Sounds like it's closer to water/trains in my opinion than yours though
there isn't a real competition of networks for the end customer (there's one cable to the house)
- there's an opaque market of firms to charge you usage on infrastructure they lease, share, or sometimes own for power that's traded in really volatile spot pricing

Middle men afford opportunity for middle men but rarely increase efficiency overall and I see them as a risk in something as critical

But yeah most of the immediate problem has been the wrong type of regulation
-sd

The problem is that the customer is divorced from the cost of the product they are consuming, believes they have a right to attain it at a 'fair' price regardless of that cost, and is insulated from the more serious consequences of picking an unsustainable supplier, while suppliers are forced to compete in a broken market which perpetuates illogical behaviour while no attention is paid to their ability to deliver a highly volatile product at a set price for the next 2 years without going bankrupt, and then the government decide to instigate a price cap...

[servodude]

No argument that it could have been done better, and that it's the way it's been done that's made it unsustainable
Sounds like it's closer to water/trains in my opinion than yours though
there isn't a real competition of networks for the end customer (there's one cable to the house)
- there's an opaque market of firms to charge you usage on infrastructure they lease, share, or sometimes own for power that's traded in really volatile spot pricing

Middle men afford opportunity for middle men but rarely increase efficiency overall and I see them as a risk in something as critical

But yeah most of the immediate problem has been the wrong type of regulation
-sd

The problem is that the customer is divorced from the cost of the product they are consuming, believes they have a right to attain it at a 'fair' price regardless of that cost, and is insulated from the more serious consequences of picking an unsustainable supplier, while suppliers are forced to compete in a broken market which perpetuates illogical behaviour while no attention is paid to their ability to deliver a highly volatile product at a set price for the next 2 years without going bankrupt, and then the government decide to instigate a price cap...

Is electricity an essential service?
Is it being run as one?

[BobbyD]

Is electricity an essential service?
Is it being run as one?

However you define its importance it's being run badly. Any system for pricing electricity should start with wholesale price. People should understand the cost of what they are purchasing, and the volatility of that price rather than thinking in terms of 2 year fixed rate deals. Government should concentrate on developing a sustainable market which rewards good practice rather than giving energy companies a populist kicking whenever possible, and energy companies while operating within that stable market should stop making long term promises to deliver that they have no way of knowing whether or not they will be able to deliver on. This would be doubly true if electricity is indeed an essential service.

[servodude]

Is electricity an essential service?
Is it being run as one?

However you define its importance it's being run badly. Any system for pricing electricity should start with wholesale price. People should understand the cost of what they are purchasing, and the volatility of that price rather than thinking in terms of 2 year fixed rate deals. Government should concentrate on developing a sustainable market which rewards good practice rather than giving energy companies a populist kicking whenever possible, and energy companies while operating within that stable market should stop making long term promises to deliver that they have no way of knowing whether or not they will be able to deliver on. This would be doubly true if electricity is indeed an essential service.

Indeed.
I can't think of many businesses/industries/"other services" that can function properly if the electricity supply doesn't
- not sure what the bar is for determining things essential but this must be up there?

There's enough risk in the system with practical demand swings and variations in production that adding a semi-regulated futures market on top seems tempting fate
It also seems strange for the UK govt to be effectively underwriting the likes of EDF

- sd

[Lootman]

Is electricity an essential service?
Is it being run as one?

However you define its importance it's being run badly. Any system for pricing electricity should start with wholesale price. People should understand the cost of what they are purchasing, and the volatility of that price rather than thinking in terms of 2 year fixed rate deals. Government should concentrate on developing a sustainable market which rewards good practice rather than giving energy companies a populist kicking whenever possible, and energy companies while operating within that stable market should stop making long term promises to deliver that they have no way of knowing whether or not they will be able to deliver on. This would be doubly true if electricity is indeed an essential service.

Indeed. I can't think of many businesses/industries/"other services" that can function properly if the electricity supply doesn't
- not sure what the bar is for determining things essential but this must be up there?

There's enough risk in the system with practical demand swings and variations in production that adding a semi-regulated futures market on top seems tempting fate
It also seems strange for the UK govt to be effectively underwriting the likes of EDF

Please tell me that you understand that options and futures can be used to reduce risk of price volatility!

There is no intrinsic relationship between something being "essential" or "necessary" and something being run by civil servants. Utilities, whilst being deemed necessary are typically in the private sector, and are regulated up the wazoo. Which, some cynical souls might aver, causes problems like these.

[88V8]

Please tell me that you understand that options and futures can be used to reduce risk of price volatility!

Yes, they can, but they eat margin.
And where there is little margin because of wholesale price, low retail pricing, and the ridiculous 'cap', options and futures are unaffordable.
The whole ramshackle supplier edifice only stood up because it was a Ponzi.

One could have forgiven a Labour govt for the price cap.
It's the sort of doctrinaire nonsense one expects.
But I find no excuse for the Tories.

And will they now have the courage to admit they were wrong, and abolish it? Hahahaha.....

V8

[dealtn]

Please tell me that you understand that options and futures can be used to reduce risk of price volatility!

Yes, they can, but they eat margin.
And where there is little margin because of wholesale price, low retail pricing, and the ridiculous 'cap', options and futures are unaffordable.

Not necessarily. You can use derivatives on a cost neutral basis (or even cash positive). You can buy upside protection (don't lose if wholesale prices rise significantly) whilst selling the downside to others. If you benefit from wholesale prices falling you can give up some of that (unneeded) margin gain to pay for your upside hedge.

In practice many of the firms chose not to use hedging, not anticipating they would need the protection that affords, quite possibly to (try to) save money, or in naivety.

[JohnB]

I loathe EDF, but can't switch our electricity from them because we have a White Meter, and no-one else understands them. When they relined the gas pipes in the street, we reconnected the gas, even though we don't use it, to avoid the pipe being cut at the main, and facing retrenching the garden in future. EDF's systems could not accept a meter reading that did not rise, so we escaped to Zog Energy, who have gone bust, and the regulator have reassigned us to ... EDF. Grrrrrrrrrrrr!

[pje16]

I loathe EDF,

Agreed I have a business account with them and 2 months ago I filled in a direct debit form, they haven't taken a penny as a result of doing that and then chased me up last weekend as £16 (wow what a fortune) was outstanding

[AF62]

One could have forgiven a Labour govt for the price cap.
It's the sort of doctrinaire nonsense one expects.
But I find no excuse for the Tories.

And will they now have the courage to admit they were wrong, and abolish it? Hahahaha.....

V8

The price cap was brought on by the energy companies behaving badly.

It was utterly immoral their design of the complexities of the tariffs they offered and that the cheapest were online only, so excluding the elderly and others not happy doing business online, and who effectively subsidised the wealthy who were buying the cheap online tariffs.

That the design of the cap was poorly thought out is bad enough, but the real issue is the ease with which the government allowed people to set up an energy company to supply consumers.

Frankly how was a business like Bulb, who boasted that they only bought short term supplies, ever going to survive if the energy price moved against them and exceeded the cap. But no matter, the government is happy that same directors who walked away without any loss from this mess will be free to set up a new energy company next week and do it all again.

[BobbyD]

Please tell me that you understand that options and futures can be used to reduce risk of price volatility!

Yes, they can, but they eat margin.
And where there is little margin because of wholesale price, low retail pricing, and the ridiculous 'cap', options and futures are unaffordable.

Futures just pass the point of failure down the line from a supplier who can't afford afford to purchase electricity at current wholesale prices to a trader who can't afford to purchase electricity at current wholesale prices. One of the reasons for recent problems was one of the French interconnects being taken out by a fire. What piece of paper is going to insulate you from the market effects of that, of oil price spikes, or...? It's a market marinated in risk. You can pass that risk on but you can not destroy it and deploying a someone else's problem field does nothing to improve the stability or viability of the market. A different business goes bust, and takes the supplier who still can't supply at the contracted price with it. It's really not an improvement! At the same time long term fixed price contracts along with the price cap prevent price rises feeding back in to the system to control demand as there is no incentive for many customers to trim their usage. If you set out to design a worse system it would take real effort.

[AF62]

And another one gone, Zog Energy, who supplied my gas.

No surprise as they had fewer than 12,000 customers, and I was only surprised they didn’t fold earlier.

Great, now with that company known for their wonderful customer service - EDF.

[Fluke]

ahem sorry to interrupt got a rather more mundane question to ask to those like me who are being moved from Igloo to EonNext. Has anyone had their credit balance transferred yet? Mine still hasn't gone across, I also note this morning that my direct debit which I set up a few weeks ago and which should have gone out on the 1st of the month, has also not been taken.

Just curious if others are in the same position.

[swill453]

ahem sorry to interrupt got a rather more mundane question to ask to those like me who are being moved from Igloo to EonNext. Has anyone had their credit balance transferred yet? Mine still hasn't gone across, I also note this morning that my direct debit which I set up a few weeks ago and which should have gone out on the 1st of the month, has also not been taken.

Just curious if others are in the same position.

My E.ON Next "dashboard" shows a "balance transfer" of about £122 on 2nd December. However my Igloo balance was nearly £300 and I estimate my final bill should have been less than £40. But I have seen no bills from either Igloo or E.ON yet, so I'm waiting to see what happens next.

E.ON Next did take a Direct Debit payment on 1st December.

Scott.

[kiloran]

ahem sorry to interrupt got a rather more mundane question to ask to those like me who are being moved from Igloo to EonNext. Has anyone had their credit balance transferred yet? Mine still hasn't gone across, I also note this morning that my direct debit which I set up a few weeks ago and which should have gone out on the 1st of the month, has also not been taken.

Just curious if others are in the same position.

My E.ON Next "dashboard" shows a "balance transfer" of about £122 on 2nd December. However my Igloo balance was nearly £300 and I estimate my final bill should have been less than £40. But I have seen no bills from either Igloo or E.ON yet, so I'm waiting to see what happens next.

E.ON Next did take a Direct Debit payment on 1st December.

Scott.

Same here. The balance transferred is less than the 'final' balance on Igloo. That may be because the actual date of transfer is later than I thought. Direct Debits are clean, I think I'll get an EonNext bill on the 17th.

--kiloran

[Cornytiv34]

Fortunately we are with Octopus and have been for three years. Their boss Greg Jackson has written a very good explanation of the problems, how they protect themselves and why companies have gone under.

https://octopus.energy/blog/the-price-c ... companies/

Mike

[UncleEbenezer]

Fortunately we are with Octopus and have been for three years. Their boss Greg Jackson has written a very good explanation of the problems, how they protect themselves and why companies have gone under.

https://octopus.energy/blog/the-price-c ... companies/

Mike

Octopus seem to have an aura of competence. Perhaps one should consider forking up an extra squid or two and moving to them?

[pje16]

Octopus seem to have an aura of competence. Perhaps one should consider forking up an extra squid or two and moving to them?

Not really, or is it that to expect competence these day you have to pay more
Call me old fashioned but I expect it

[kiloran]

ahem sorry to interrupt got a rather more mundane question to ask to those like me who are being moved from Igloo to EonNext. Has anyone had their credit balance transferred yet? Mine still hasn't gone across, I also note this morning that my direct debit which I set up a few weeks ago and which should have gone out on the 1st of the month, has also not been taken.

Just curious if others are in the same position.

My E.ON Next "dashboard" shows a "balance transfer" of about £122 on 2nd December. However my Igloo balance was nearly £300 and I estimate my final bill should have been less than £40. But I have seen no bills from either Igloo or E.ON yet, so I'm waiting to see what happens next.

E.ON Next did take a Direct Debit payment on 1st December.

Scott.

Same here. The balance transferred is less than the 'final' balance on Igloo. That may be because the actual date of transfer is later than I thought. Direct Debits are clean, I think I'll get an EonNext bill on the 17th.

--kiloran

More progress this morning. I got an email requesting another meter reading. Did that and got a note that I would get a bill within 2 days. I also noticed that my account now shows the tariffs for gas and electricity..... wasn't there a day or two ago

--kiloran

[Fluke]

More progress this morning. I got an email requesting another meter reading. Did that and got a note that I would get a bill within 2 days. I also noticed that my account now shows the tariffs for gas and electricity..... wasn't there a day or two ago

--kiloran

Ah, just logged on again and a credit has now been transferred over but only £48.89 of the £140.83 that was there. My account is now in debit more or less equal to the remaining untransferred credit