Gas Prices, Supply Issues and Collapsing Suppliers

[rosy]

Inspired by Epp on the Wednesday thread:

I’m not sure I understand everything that is going on with gas supplies and prices, but I was listening to You and Yours earlier and it seemed to be very doom and gloom, especially coupled with the reduction in Universal Credit so the energy price rises will make things even harder for those on a lower income.

The BBC says 1.5 million customers have been affected by their supplier going bust, and this seems to be just the beginning.

https://www.bbc.co.uk/news/business-58657802

I’m with one of the smaller companies at the moment, So Energy and my bills are not too bad, £45 a month (but then my house is very small), but I don’t think my budget could cope with big price rises.

Also, can anyone explain what the price cap means, since they said on the radio that it’s not a maximum that a bill can be?

[smalex]

I think it means that there's a limit to how much the energy companies can increase the prices. The problem is (as far as I've read/heard) that lots of smaller companies hedged on falling/lower prices, and/or offered loss leading deals to people to try and expand their business, but the prices are sky rocketing because of issues in the supply and our lack of spare stored capacity (far less than other european countries),the companies can't up the costs they pass onto customers because of the cap, so they're going bust. These customers then get passed to the larger companies who don't have to honour the deals anyway, so they end up with much more expensive bills. I think, anyway.

S works for an energy company (one that is now one of the big ones), the bigger companies don't have any choice but to take on the smaller ones, they're forced to, he has to get involved (not directly with supply or energy costs) when his company have to absorb a new one. He said to me just last week- did I know the costs were sky rocketing and 'I cant believe it's not in the news' and then lo and behold a couple of days later everyone cottoned onto it.

[Kenickie]

I need to switch which I'd not got round to for a couple of weeks and now I don't know what to do. I guess go for a big company and maybe fix?

[smalex]

I'd have thought the bigger companies were a safer bet, although I think even bulb ? are teetering.

I think S said his company aren't even taking anyone new atm (or maybe he said they're just not advertising, I'll check).

[Kenickie]

Oh no, maybe I need to do it quickly then.

[smalex]

Sorry, no, a news article I've just read says they're just trying to 'deter' new customers (by making it slightly less easy to sign up). It seems batshit though, they're the 3rd biggest (or something) energy supplier and they're trying not to sell more energy ?!

[Kenickie]

Hah, I'll expect a million page form to fill in then. ;)

[Livilla]

Sorry, no, a news article I've just read says they're just trying to 'deter' new customers (by making it slightly less easy to sign up). It seems batshit though, they're the 3rd biggest (or something) energy supplier and they're trying not to sell more energy ?!

There is bound to be a lot of issues around suddenly scaling their systems up to come with a big influx of new customers - yes, in theory, they want to sell more energy, but they have to have the infrastructure and system architecture to be able to handle it - from call centres, staff to process them, setting up the handover and billing, having the capacity to deal with people using their online systems etc. Being swamped with unplanned demand is generally a complete nightmare for companies.

[wendy james]

Martin Lewis has been talking about it for ages.

My supplier went bust earlier in the year so I had been moved to EDF. I had registered with MSE so they knew all about it and were more helpful about what was happening than my previous or new supplier! Anyway, they gave the transferees a decent rate for a bit but then as it was running out, contacted me about locking myself in. I read the latest MSE update, did some comparisons and opted to stay where I was.

It could be worth seeing what they are suggesting at the moment Ken.

[Kenickie]

Oh that's a good idea. I will check MSE!

[Kenickie]

I've looked at MSE and still feel a bit muddled. It looks like all the good deals have gone, so it might make sense just to stay on a variable rate for now - but then if things are as bad in April, it might rocket up then. So it comes down to definitely paying about £25 a month extra now vs maybe paying loads more after April. I'm annoyed I put off switching now as I thought it wasn't urgent!

[Kenickie]

I think I'm going to fix with British Gas who seem unlikely to go under!

[Kenickie]

My bills will be going up by £768 a year.

[smalex]

Christ! What sort of percentage is that?

[Kenickie]

It's been £51 a month this year and it's going up to £115 so more than doubling. The variable with my current supplier (Ovo) was £81 a month but I'm not sure if they've increased the costs to the level of the cap yet or not so it might have gone up.

[smalex]

Eeesh. That's a lot. Fuck. I mean, we're in no way hard up but that's money we'd have to consciously reallocate from something else. Impossible for so many people.

Ovo is Ss employer.

[rosy]

Bloody hell, that’s a massive hike.

I hope we get a mild winter, otherwise some people are going to really struggle.

[Ella77]

Fucking Brexit. I hope the Leave voters are proud of themselves, the absolute turds.

[smalex]

Is brexit actually to blame or just another ludicrous promise quickly proven wrong?

[Ella77]

Well, no European country is as badly affected by far.