Our domestic electricity contract expires early July, so time to look at the market.
Current provider is OVO, paying 70pm for a little over 3,000 units last year.
Best options according to Money Saving Expert are OVO at 142pm fixed for one year or Utility Warehouse at 100pm variable.
Your thoughts? Are electricity prices more likely to continue rising, making OVO the better bet? I'm inclined to stick with OVO, as at least I know the exact cost over the next twelve months. OVO also offer 2 year fixed at 149pm or variable at 103pm. Hmm.
I'm with OVO too, on a fixed deal that also expires next month.
The OVO fixed deals being offered to me have unit costs for electricity and gas that are about 50% up on the variable unit costs that will kick in for me in July.
The 64k dollar question is what do the pundits thing the new cap rates from Oct 1st be ? They seem to think about 50% up in the present caps. However, if I jump to the fixed deal from next month, then I'll be paying over the odds until Oct 1st. And then what happens on Jan 1st, when the cap changes again. And what about standing charges ?
The entire energy market has been reduced to a betting game.
Our annual usage is 3000 kWh for electricity, 15,000 kWh for gas
Forget about monthly prices, they are often just Direct Debit guestimates. Look at the unit rate(s) and standing charge. They're the most important things. It's a simple calculation to work out how much you will pay for different levels of usage. Also check whether the rates include the 5% VAT or not.
Next up, consider when you use your energy. For example, if you have a gas or oil boiler you might use almost the same amount of electricity in the winter as the summer, but if you have electric heating it would be massively different. Maybe you do loads of tumble drying in the winter, but none in the summer. Maybe you have more showers in the summer. etc etc
So your decision needs to be based on how much energy you think you will use at different times of the year, given the price cap adjusts at 6 month (soon to be 3 month) intervals.
For example, the current price cap is about 30p/kWh and the October one is looking like 40p/kWh. If you have electric heat, fixing now on (made up number) 36p/kWh might save if much of your energy is in the winter, but if you had flat usage then paying 6p/kWh more now to get a 4p/kWh discount in the winter might not make sense.
And then throw into that mix where prices might go after October, depending on your crystal ball. You could do a calculation: 'how much do variable prices have to rise before the fixed tariff wins' - you may find the answer is 'quite a lot'.
It's not the exact cost, because it depends on usage. If it's a cold winter, you'll likely use more energy. How much that affects your electricity consumption depends on what you use it for.
In message <2Dz* snipped-for-privacy@news.chiark.greenend.org.uk>, Theo <theom+ snipped-for-privacy@chiark.greenend.org.uk> writes
Lots of useful points, thank you. Our heating is oil, we don't have a tumble dryer and most of our bulbs are LED, so there is little difference in consumption of electricity summer or winter. The only blip tends to be when our son is home from uni with his turbo powered gaming PC!
Plus the suppliers have also used their (perhaps more accurate) crystal balls and already factored in expected price rises into their new fixed rate tariffs.
Yes! These *are* the most important things. Anyone can offer to charge you (say) £50 per month. They will not add "But in a year's time, you'll be owing us £200, which we'll add to your next year's monthly payment, which will therefore be just over £80, assuming no further price increases." I worked in the industry when deregulation took place, and I saw it happen.
As Theo also says, it helps to know your usage pattern. I set up a spreadsheet years ago to do this. I read the meters on the first of every month, and I can see how much I've used, and the cost, including standing charge. Not difficult, and doesn't take long. Then when some supplier offers me an amazing deal, I can call them out for the con merchants they probably are.
In message snipped-for-privacy@4ax.com, John Armstrong snipped-for-privacy@blueyonder.co.uk> writes
I too take monthly figures, and have usage patterns going back nearly twenty years :-) Yes, it is useful, and interesting to watch the longer term effects of changes of habits, fitting LED bulbs etc. Quite fun to surprise energy company droids by quoting exact usage, exact state of my account etc. I'm surprised so many people have no idea of how much power they use, when and why. I do exactly the same with oil consumption. I began recording figures when I was self employed, and could offset part of my home expenses against self employed income.
Not just that, but suppliers are currently making a loss on the capped variable tariffs, while the fixed tariffs offered to new customers are market-priced.
It remains to be seen whether going 3 monthly will narrow this gap, but for the moment there's a strong reason to stick with the capped tariff. The price cap looks backwards - currently based on the average cost over the last 6 months. The fixed tariffs look forwards - projected market costs over the next year. When prices are rising, the last year is cheaper than the next year. When prices are falling, the future is cheaper than the past.
So essentially it boils down to whether you think prices will continue to rise (and so the capped variable tariff is cheaper) or the market thinks they will fall (fixed tariffs will bring forward and lock in some of that fall).
The market is always predicting where prices will go, and the fixed tariffs on offer will reflect that. If they are quoting much higher fixed tariffs, it sounds like they're expecting prices to go higher. Of course, the market pricing is a only prediction based upon current information: by fixing what you are really hedging against is future events we don't know about yet (weather, war, politics, etc)
However, if prices do fall you are free at any time to leave the capped variable tariff and sign up for a new fix elsewhere. So it's not a decision you have to make right now.
Some months ago I received a fixed-price offer from my energy supplier.
It took about 10 minutes to draw up a spreadsheet using historic consumption data, to compare the fixed offer with current prices over the following 12 months and factoring in various values for the expected rise in October.
The outcome was that if the increase in the cap is more than 93%, I lose out. I stayed with the variable tariff.
On Mon, 27 Jun 2022 10:56:57 +0100, Mark Carver snipped-for-privacy@invalid.invalid wrote: [snip]
I have a rather different problem.
I have a lock-up garage with its own power supply (it's not adjacent to my flat) and the electricity bill has increased by 800%.
I use about five units a month. I previously had a zero standing charge tariff and the quarterly bill was about £5. I have now been moved to standard variable tariff and have just received a bill for £47. I believe there are now no zero standing charge tariffs available in the UK.
My first thought was to contact the supplier, British Gas (forced transfer) and point out that it is illogical to treat a garage as though it were a house. Then I realised the answer might be: 'Thank you, Scott, for letting us know about this. We agree this is not a domestic supply. This means the Ofgem price cap does not apply so we will make it £100 instead'.
Any ideas (that are legal)? The obvious one would be to discontinue supply but I don't want a reconnection charge if the situation becomes resolved.
Ebico used to do one, but I think they stopped after they merged with CorbynPower.
Someone did find another zero standing charge tariff and mention it here a couple of months ago?
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Beware the "sting" price for the first (if any) unit used per day, so it'll depend whether you use a tiny amount every day, or zero most days with some usage on a few days per month?
Mine used to be Ebico but when Robin Hood Energy went into administration Ebico ceased supplying and customers were transferred to BG. At first BG continued the existing tariff (beyond its expiry, I think) then discontinued it.
I tried Utilita at the time, but they said they would not supply unless the meter was changed (as they claimed the smart meter I had was incompatible) and because it was a non-domestic supply I would have to arrange and pay for the meter change.
It's closer to the former as the power is used to open the door, although I don't use the car every day. When I Googled generally, the indication was that there are no zero standing charge tariffs. I believe some suppliers are not taking on new customers at all.
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