This is getting ridiculous (energy prices)

[Alex_6n2]

Interesting read from Ed on the UK's current gas situation

The surreal, but also real, problem of Britain's gas glut

The UK is drowning in gas - but consumers will get little or no relief from these very low prices, writes Ed Conway

news.sky.com

The political decision to close a lot of the UK's LNG storage is now looking REALLY stupid

Didn't know how positive the UK's capability to import LNG was vs most of Europe.

Wonder if all this will actually translate into sustained reductions of UK Natural Gas futures pricing.....

 

[Mrwong]

Interesting read from Ed on the UK's current gas situation

The surreal, but also real, problem of Britain's gas glut

The UK is drowning in gas - but consumers will get little or no relief from these very low prices, writes Ed Conway

news.sky.com

The political decision to close a lot of the UK's LNG storage is now looking REALLY stupid

Didn't know how positive the UK's capability to import LNG was vs most of Europe.

Wonder if all this will actually translate into sustained reductions of UK Natural Gas futures pricing.....

We had to build new homes for foreign investors that will never live in them. Help jack up home prices by getting ride of storage.

 

[Haggisman]

It will make a massive difference to me, fixed DD assumes I will use much more in winter so I end up with a very high credit balance, at one point late last year I had over a £1000 in credit, and was £900 in credit in December.

I will be changing to variable after an issue is resolved probably before start of June.

It clearly doesnt just divide the previous year total by 12 otherwise we wouldnt have people overpaying by so much. We have had people in this very thread been quoted an annual cost, and then with a DD set much higher. The companies are currently been investigated for it. Also it isnt actually fixed either, the amount constantly gets adjusted after every reading. So there is an algorithm at play. Part of the confusion is people actually think its fixed when its not.

Not sure why you are blaming the algorithm here - you've obviously not set your DD correctly.

As @touch says, the calculation isn't complex - it's just your annual usage/12. Before April, my DD amount didn't change in 12 months, and has perfectly covered my annual usage to within £12, because I set it to exactly the right amount to cover my usage.

Obviously if you've just moved into a new property you may not have an accurate idea of what your usage is going to be, but you clearly aren't in that position since you're making such a fuss about it.

The algorithm will be based on averaging hundreds (if not thousands) of data points from existing customers, so obviously it's not going to accurately reflect someone with atypical usage such as yourself, but like I said, if you know your usage then just set the DD to a figure you know will cover your usage. If you can't be bothered to do that then don't complain you aren't paying the right amount.

I never proposed fixed DD goes away so would have no issue with it been offered.

But I do take issue that they both equal cost. Fixed DD you pay in advance so you out of pocket, and in addition its algorithms are not perfect leading to some customers been in credit for long periods, even over winter, my theory as to why that happens to some people is maybe the algorithms assume the winter bill will be much higher and for those it isnt, they end up over paying, there is also the potential some suppliers are deliberately making it too high to build cashflow (which is currently been investigated by ofgem and ministers). I know e.g. my winter bill is barely any higher than my summer bills which I think throws the fixed DD algorithm completely off. I do think it would need to be part of the explanation that fixed DD you may end up paying more, but smooths the adjustments made to payments in colder months.

Bear in mind fixed DD does not assure DD's dont change, I am still on fixed DD and it changes daily the amount, plus as we know it changes when SVR cap changes. If we keep telling peopled fixed DD is actually fixed they going to be in for a shock this October, then the January after and so on (as from October SVR is changing every 3 months).

Except you don't. I don't understand why this is such a difficult concept to grasp. If you use 5,000 units of electricity @ 30p and 10,000 units of gas @ 10p, then you pay for 5,000 units of electricity @ 30p and 10,000 units of gas @ 10p. It doesn't matter* whether you pay by fixed monthly DD, quarterly DD, pay in arrears when you receive the bill, send a cheque to the supplier, deliver a truckload of 1p coins in person or barter for a herd of goats, you still only pay for 5,000 units of electricity @ 30p and 10,000 units of gas @ 10p. You may end up with a credit on your account if the DD is set too high, but that money is still yours, it doesn't just disappear, and you can either request a refund or reduce your DD to below your usage so that the credit gradually reduces. Regardless, you still end up paying the same amount.


* we'll ignore any discounts given for paying by DD for the sake of simplicity.

 

[SDK^]

Just responding to the point about Ofgem not reducing the price cap.

The price cap is currently set in April and October and is based on the previous 6 month wholesale price. Historically Ofgem have reduced it when the wholesale price has dropped - see this chart below; the black horizontal lines show the price caps.

 

[jpaul]

The political decision to close a lot of the UK's LNG storage is now looking REALLY stupid

the (negligent) sky article implies current govt are responsible - but issues was known in 2011, france having 90 days storage and us a few weeks didn't happen overnight

Report: UK 'must double gas storage capacity by 2020'

www.planningresource.co.uk

when was the last time I saw a giant above ground gas container - did the councils sell off the land, from, then, nationalised gas ?.


maybe with an older combi boiler standby is higher - but ours is <10 years

This means for the maximum annual power consumption of different device classes with a daily standby duration of 22 hours:

1. Device without information display (0.5 W): approx. 4 kWh
2. Device with information display (1 W): approx. 8 kWh
3. Device with high network availability (8 W): approx. 64 kWh

Aldi and other supermarkets need those electronic item price tags, as it must be a full time job updating the tags at the moment (butter, cream, milk, coffee ...)
I'm sure i've seen them somewhere in the uk/france.

 

[chrcoluk]

Not sure why you are blaming the algorithm here - you've obviously not set your DD correctly.

As @touch says, the calculation isn't complex - it's just your annual usage/12. Before April, my DD amount didn't change in 12 months, and has perfectly covered my annual usage to within £12, because I set it to exactly the right amount to cover my usage.

Obviously if you've just moved into a new property you may not have an accurate idea of what your usage is going to be, but you clearly aren't in that position since you're making such a fuss about it.

The algorithm will be based on averaging hundreds (if not thousands) of data points from existing customers, so obviously it's not going to accurately reflect someone with atypical usage such as yourself, but like I said, if you know your usage then just set the DD to a figure you know will cover your usage. If you can't be bothered to do that then don't complain you aren't paying the right amount.



Except you don't. I don't understand why this is such a difficult concept to grasp. If you use 5,000 units of electricity @ 30p and 10,000 units of gas @ 10p, then you pay for 5,000 units of electricity @ 30p and 10,000 units of gas @ 10p. It doesn't matter* whether you pay by fixed monthly DD, quarterly DD, pay in arrears when you receive the bill, send a cheque to the supplier, deliver a truckload of 1p coins in person or barter for a herd of goats, you still only pay for 5,000 units of electricity @ 30p and 10,000 units of gas @ 10p. You may end up with a credit on your account if the DD is set too high, but that money is still yours, it doesn't just disappear, and you can either request a refund or reduce your DD to below your usage so that the credit gradually reduces. Regardless, you still end up paying the same amount.


* we'll ignore any discounts given for paying by DD for the sake of simplicity.

I dont set my DD, its set by Octopus. Dispite people defending it and making claims it works perfect, it doesmt, you only need to search posts on here by multiple people that clearly show their DD is not set to their annual usage. In addition a point you ignored "the providers are currently been investigated for the practice of setting DD's higher than usage"

The algorithm will be based on averaging hundreds (if not thousands) of data points from existing customers

I know and what this means the customers who fall outside of normal use patterns may get an inaccurate predicted usage and hence a DD thats not set to the right level.

The bit that you dont seem to grasp is that you assume the automatic DD on fixed DD is accurate, what is this assumption based on?

If you use 5,000 units of electricity @ 30p and 10,000 units of gas @ 10p, then you pay for 5,000 units of electricity @ 30p and 10,000 units of gas @ 10p.

Disagree for the reasons I said above.

If your statement was true than why have I been in credit for my entire time on Octopus which is multiple years with the credit balance slowly building over time until it peaked at over £1000 late autumn, and was £900 in the most recent winter. That simply should not be happening if your statement was true. As I said before I think the algorithm breaks when winter usage is less than expected, many people use an extreme amount of energy in winter, whilst I dont. So Octopus build up my balance anticipating me to use it in the Winter, I dont and hence the problem.

Also what is your answer to people getting statements such as predicted annual cost £2000, monthly DD set to £300, how does 12 x £300 = £2000?

I just checked my historical bills.

For 2021 I was billed a total of £813.69 gas+electric including SC and VAT.
My DD's were as follows 78,81,83,83,84,86,86,86,85,89,91,93 total £1025.
I was on a fixed deal until October, last 3 months SVR. So the DD's still moved around on fixed pricing. I remember one month reducing the DD massively, but then it was auto increased again on the payment day.

I expect in 2020 which had lower prices right through the year the gap was bigger.

i expect you will come back claiming this doesnt happen, so will leave it here, but if you search the dozens of pages on this thread the other energy threads you will find reports of people with over inflated DD's compared to their annual usage, and there is others aside from me who have a credit balance all year round.

 

[touch]

I know and what this means the customers who fall outside of normal use patterns may get an inaccurate predicted usage and hence a DD thats not set to the right level.

This is why I made it clear in my post that it's simple "if you know how much you use over a year".
My fixed DD is accurate because it's not set based on their predicted usage, it's set based on my accurate historical data. I know exactly how much i've used over the past few years. If you're taking their predicted usage figure then it's not surprising your DD value wasn't set correctly.

 

[chrcoluk]

This is why I made it clear in my post that it's simple "if you know how much you use over a year".
My fixed DD is accurate because it's not set based on their predicted usage, it's set based on my accurate historical data. I know exactly how much i've used over the past few years. If you're taking their predicted usage figure then it's not surprising your DD value wasn't set correctly.

Your provider lets you set it and then doesnt change it by themselves?

Octopus are predicting I will use £3800 of electric this year (and £180 gas) lol, noticed it on my most recent bill, thankfully the DD hasnt been adjusted for that amount. The actual bill based on automated smart meter readings was circa £30 for 18 days.

 

[touch]

Your provider lets you set it and then doesnt change it by themselves?

Octopus are predicting I will use £3800 of electric this year (and £180 gas) lol, noticed it on my most recent bill, thankfully the DD hasnt been adjusted for that amount. The actual bill based on automated smart meter readings was circa £30 for 18 days.

Yes, I'm with Octopus too.
I'm on the variable rate and when the prices changed recently I calculated that my monthly cost should increase from £80 to £140. Octopus made a similar calculation and put my DD up to £146 but I was able to change this to £140 myself.

Edit: found where to see the predicted cost in my account. Octopus predict £1743 (which is where the £146 DD must have come from) and my own calculations predict £1680. I've been with Octopus for 2 years and submit a meter reading every month.

 

[ci_newman]

Yes, I'm with Octopus too.
I'm on the variable rate and when the prices changed recently I calculated that my monthly cost should increase from £80 to £140. Octopus made a similar calculation and put my DD up to £146 but I was able to change this to £140 myself.

Some suppliers (BG for example) don't allow you to reduce your DD though, they only allow you to increase it. After this winter I was £200 in credit on my gas account.

 

[touch]

Some suppliers (BG for example) don't allow you to reduce your DD though, they only allow you to increase it. After this winter I was £200 in credit on my gas account.

Yes, I've had that problem with previous suppliers in the past. Sometimes it will let you reduce it after you've built up a bit of credit. Or you can phone them and they'll probably let you change it.

 

[chrcoluk]

Yes, I'm with Octopus too.
I'm on the variable rate and when the prices changed recently I calculated that my monthly cost should increase from £80 to £140. Octopus made a similar calculation and put my DD up to £146 but I was able to change this to £140 myself.

Edit: found where to see the predicted cost in my account. Octopus predict £1743 (which is where the £146 DD must have come from) and my own calculations predict £1680. I've been with Octopus for 2 years and submit a meter reading every month.

For me right now my actual cost is way below my DD, but my DD is also way below their predicted cost, so the DD is in no mans land. After an issue is resolved this week, I am switching to variable DD to get rid of the mess.

All my readings are now automated every 30 mins, so they got no excuse to get it so wrong now. If they didnt auto increase my DD when I reduced it, I wouldnt be so anti fixed DD, but that didnt happen for me.

 

[touch]

For me right now my actual cost is way below my DD, but my DD is also way below their predicted cost, so the DD is in no mans land. After an issue is resolved this week, I am switching to variable DD to get rid of the mess.

Have you tried changing it?
Log in to your account and on the dashboard page below where it shows your balance and monthly payment there's a link to "Change my payments". That's how I did it and it let me set my DD to the right amount.

 

[chrcoluk]

Have you tried changing it?
Log in to your account and on the dashboard page below where it shows your balance and monthly payment there's a link to "Change my payments". That's how I did it and it let me set my DD to the right amount.

Yep tried last year when I noticed my credit balance was so high, it was accepted but I was given a warning it will be increased if they believe it set so low, I then noticed the normal amount got taken out my bank a couple of weeks later, and seen it was adjusted back on my account, I havent tried to reduce it again this year.

 

[Chris1712]

Just responding to the point about Ofgem not reducing the price cap.

The price cap is currently set in April and October and is based on the previous 6 month wholesale price. Historically Ofgem have reduced it when the wholesale price has dropped - see this chart below; the black horizontal lines show the price caps.

That's a very useful visualisation, is there a more up to date version out there? I know the Winter 22 level hasn't been set yet but would be interesting to see.

 

[Haggisman]

I dont set my DD, its set by Octopus. Dispite people defending it and making claims it works perfect, it doesmt, you only need to search posts on here by multiple people that clearly show their DD is not set to their annual usage. In addition a point you ignored "the providers are currently been investigated for the practice of setting DD's higher than usage"

That's strange, because I'm also with Octopus, and I have full control over my DD amount. Like I said, I set it to the correct amount just over a year ago, and until April it hasn't changed at all. I manually updated it in April to take into account the increase on costs as my fixed gas tariff ran out. Octopus themselves haven't updated it or had any communication with me about changing it in the past 3 years since I joined them.

I know and what this means the customers who fall outside of normal use patterns may get an inaccurate predicted usage and hence a DD thats not set to the right level.

The bit that you dont seem to grasp is that you assume the automatic DD on fixed DD is accurate, what is this assumption based on?

I do grasp that, I said as much in my post. I also said that if you know your usage isn't typical (as you do) then adjust your DD accordingly.

Disagree for the reasons I said above.

You can disagree all you want, that doesn't change the fact you are wrong.

If your statement was true than why have I been in credit for my entire time on Octopus which is multiple years with the credit balance slowly building over time until it peaked at over £1000 late autumn, and was £900 in the most recent winter. That simply should not be happening if your statement was true. As I said before I think the algorithm breaks when winter usage is less than expected, many people use an extreme amount of energy in winter, whilst I dont. So Octopus build up my balance anticipating me to use it in the Winter, I dont and hence the problem.

Thank you for agreeing with me and proving my point, as you say yourself, you have been IN CREDIT. The money is still there, it is still yours, and you can withdraw it or use it towards your bills if you want. If what you were saying was true and that you were paying more for your energy, then that money wouldn't be showing as a credit on your account, it would have been swallowed up by increased energy costs because for some inexplicable reason you would have been paying higher unit rates than your tariff.

Also what is your answer to people getting statements such as predicted annual cost £2000, monthly DD set to £300, how does 12 x £300 = £2000?

Got a link for that or is it just a made up example?

I just checked my historical bills.

For 2021 I was billed a total of £813.69 gas+electric including SC and VAT.
My DD's were as follows 78,81,83,83,84,86,86,86,85,89,91,93 total £1025.
I was on a fixed deal until October, last 3 months SVR. So the DD's still moved around on fixed pricing. I remember one month reducing the DD massively, but then it was auto increased again on the payment day.

Fixed pricing != fixed DD, and to me that looks like you weren't on a fixed DD because even if the supplier were adjusting the DD to compensate for a large credit/debit build up, they wouldn't do so on a monthly basis.

I expect in 2020 which had lower prices right through the year the gap was bigger.

i expect you will come back claiming this doesnt happen, so will leave it here, but if you search the dozens of pages on this thread the other energy threads you will find reports of people with over inflated DD's compared to their annual usage, and there is others aside from me who have a credit balance all year round.

I'm not going to claim this doesn't happen, as I'm sure it does in some circumstances, but I refuse to accept that it's typical for someone on a fixed DD unless I'm literally the luckiest person in the country, since I've never experienced it in my last 20+ years of paying energy bills. The whole point of a FIXED direct debit is that it is FIXED - they aren't going to change it by £3-4 every month.

I'm well aware that some suppliers are artificially inflating DD amounts at the moment, in order to increase their cashflow. That is a completely separate argument, and still doesn't change the fact that paying by fixed DD does not mean you are paying more for your energy. It just means YOUR MONEY is sitting in the energy supplier's bank account rather than your own.

Now if you have a problem with that then fine, I can understand that, and by all means join the people taking suppliers to court over it, but don't spread misleading information about being charged more.

 

[PlacidCasual]

With regards to that Sky article. The prices aren't unusually low they are at 40-100p/therm which is the long term historic band if you exclude Covid and post Covid. Also the Brough storage facility wasn't closed on a whim it was because of safety concerns. Although as some else has mentioned the issue has been known about for years and hasn't been addressed. The false assumption was that the UK's relatively large LNG terminal capacity made this unnecessary. But things like Fulikshima and now Ukraine have made that assumption look pretty asinine.

 

[jpaul]

The prices aren't unusually low they are at 40-100p/therm which is the long term historic band if you exclude Covid and post Covid.

as well, these are market prices, and don't reflect the energy pre-bought on the futures market, so could be even cheaper ?

media seems to continually compare cap against wholesale price too , but that's not the price the energy had been pre-purchased at,
and, for cap setting, the price of pre-purchased energy wasn't an unknown;
perhaps generators accounts give a breakdown of how much the energy was sold at.

Got a link for that or is it just a made up example?

all the furore about people having direct debits set erratically , seems evidence lacking ... ofgem are tasked to investigate by kwasi kwarteng, which could be interpreted as a political pacification manouver.

why don't energy companies just post the algorithm, to avoid speculation, or, did someone reverse engineer it/them.

 

[bigmike20vt]

Not getting into any arguments but my experience is as follows.... I am with Octopus and my account was in arrears of £130 due to Crypto mining for 6 months and me not updating my DD. then last July my solar went online and over the next 3 months i paid off my deficit and tried to cut my DD to £60 for combined leccy and gas. The automated system said I could not lower that much, I fired off a mail to octopus explaining i had battery backed up Solar and knew my payments were too high. a few days later i got a mail agreeing to lower to what i wanted but they warned me if i fall behind it will auto adjust. Fair enough.

this worked fine for me till december time where with lack of solar i went back into arrears again. preparing for the dreaded price increases and the end of my fixed term at the end of April i manually upped my payment to £90........ I ended up on an amazing deal and i am now in credit again. once more i have tried to lower to £60, and it said it cant do it automatically but to contact support. I suspect once again, once they see i am paying more than i am using they will again agree to cut payments.

TLDR the DD payments are an estimate for those who just want to click and forget, but it is our finances and ultimately it is our responsibility to watch them and if needed take control. IME Octopus are more than fair when it comes to taking payment IF you talk to them and give them some stats. that is just my experience however.

 

[Greebo]

the (negligent) sky article implies current govt are responsible - but issues was known in 2011, france having 90 days storage and us a few weeks didn't happen overnight

Report: UK 'must double gas storage capacity by 2020'

www.planningresource.co.uk

when was the last time I saw a giant above ground gas container - did the councils sell off the land, from, then, nationalised gas ?.


maybe with an older combi boiler standby is higher - but ours is <10 years



Aldi and other supermarkets need those electronic item price tags, as it must be a full time job updating the tags at the moment (butter, cream, milk, coffee ...)
I'm sure i've seen them somewhere in the uk/france.

Those massive gas tanks you used to see in every city/town was down to the old way gas was supplied to properties. Once they werent needed to smooth out supplies to cities and the gas was ample to just come direct to peoples houses they were decommissioned by British Gas and sold off for development. I used to work for a company on 80s/90s and we decommissioned about 10 of them. Expensive job as lots of toxic chemicals/sludge inside of them but still worthwhile for what they got from developers.