(11 February 2022). Despair at having a government who do everything wrong has frozen my fingers and brain from this site. Nevertheless, slightly enlivened, by a little sunshine and Google telling me that this site had 13 visitors in January I will be trying to post more frequently.
I have talked about energy before and feasible solutions that make energy costs fairer (apologies for unsophisticated link, don’t know how to make fancy ones)
Today I am puzzled by the scheme to give a council tax “bonus” to those in Bands A to D. Not everyone in an ordinary house is poor- and many poor live in rented accommodation.
It is not too late for Mr Sunak to consider the following alternative.
Every household that has an online account with an energy supplier (and is eligible according to benefits and household income) simply goes to their supplier and claims the money off their bills. They also promise that they are eligible and will go to prison for a month if they cheat. They will also allow all claimants to be on a list for journalists or others to check if well-known people are cheating.
For those without an online account they can go to the post office and fill in the form -sent to their supplier.
(3 July 2020) As part of sorting out my mother’s “estate” (as it is grandly called) I have taken over her energy bills. This precipitated two thoughts.
The service is provided by EDF- the world’s largest electricity producer with over 60% of it coming from nuclear power. It is also a French state company. I, in my simple way, fail to understand why the government “privatised” the British State energy producers and then allow the French government to take over. I assume this will change after Brexit and we “take back control”.
However, what outraged me the most was the price my mother was paying.
Her standing charge for electricity was 29.02p and gas was 31.99.
EDF has a consistent standing charge for both of 24.05 and 27.35
So, over a year EDF were taking an extra £21.14, just because they could, from someone not familiar with “switching”.
If you look at this nationally there are 6.5 million households headed by someone over 65 and 3.8 million over 65s live alone.
Given that this group are most likely to be IT illiterate or deficient and assuming 3 million of this group have never switched then some big numbers appear.
On the electric standing charge this generates over £49 million a year and for gas it is less but still just under £14 million.
On standing charge alone this equates to £ 63,414,000 excess revenue.
On the kwh rate she was paying 19.27p for electricity and 3.786 for gas.
EDF’s most expensive tariffs are 17.83 and 3.504.
On their calculations of her usage they were taking an extra £25 for electricity and £21 for gas. Over £80 a year, just like that.
Applying these calculations to the population as above and if it was EDF (and I suspect this is the same for all the older companies) then they are trousering an extra £241,743,840 a year or over £20 million a month.
I am not sure why this is allowed.
I changed the EDF tariffs through a reasonably straightforward online form.
My suggestion for my readers would be, if you know any digitally disadvantaged people, to help them change tariff, even staying with the same company if they are afraid of a switch.
Don’t go to the pub on Saturday as it will be chaotic. Just enjoy this kitten instead.
(9 April 2020) I have just gone through the irritating process of switching energy suppliers, sparking off a number of thoughts.
When a supplier phones or accosts me in the street they always claim to reduce my bill.
They want to know who my current supplier is and then they make up a figure to save me money. However, they (and I have had argument with the street people about this) refuse to tell me how much they are actually charging. It is quite simple- there is a per kilowatt hour cost and a daily standing charge. This is what one needs to know but they won’t tell me.
It is like someone telling me they can save on my supermarket bill by asking me who I shop with without telling me what they charge for apples.
You can find these out if you bother to delve into the depths of a company’s website.
I realised then that the energy market is one from the list of The Bad Things we are lumbered with from Thatcherism.
There are now over 60 companies who “supply” i.e. just bill you, for energy. This complication is bad enough but there are also over 75 companies who offer an energy broking service or switching service to help one through this unnecessary maze.
While I am sure all the individuals who work for these companies are decent human beings and are kind to their pets, a sane and organised society would not need all these- they are an example from the list of Totally Pointless and Unnecessary Occupations.
Energy Board -In practical terms there has to be an organisation that gets the gas and electricity to your home- all the others are pointless. We could, for example, as we live in a democracy (so the government works for us) have a body for each region. Thus, in London we could have the London Energy Board, open, transparent and with some elected representation. Instead London is controlled by EDF a French company for example and in Scotland, Scottish Power is obviously Spanish owned.
Unfair Pricing- We are all aware of climate change and the need to reduce energy consumption. Yet our current system, as well as being almost incomprehensible, discriminates against poorer households.
The best deals come from using direct debits, however, estimating conservatively, about a third of the population live in poor households with low and / or irregular income and cannot set up direct debits. So, they are charged extra for monthly billing or- even more if they have to have a pay meter.
Then there is the standing charge, quite wicked because it is fixed irrespective of usage so that those who use less pay a higher unit rate. It is a regressive charging system.
I did some sums- just for electricity though the same principle would apply to gas. I assume that the Kilowatt pe hour (KWH) rate is 15p. The daily standing charge is 30p (all the companies quote fractions of pennies as it makes it far more difficult to work out with mental arithmetic) and according to OFGEM (a regulator who probably do a good job but would not be needed under democratic control) a typical household uses 4,000 kwh a year.
So, for this household, adding on the standing charge and working out the unit rate, this average household pay 18p for each unit.
A poorer household, using half this amount pay 20p a unit.
A prosperous household – perhaps with an electric jacuzzi, use double the average and pay 16p a unit thus paying 20% less for what they buy.
The justification for the standing charge is that it covers fixed costs of providing the supply- meter, holes in road, pipes etc. Nevertheless, as users are also billed for what is used there is no actual justification in it being so high.
I took my sums and boosted the KWH rate to 17p and reduced the annual standing charge to a modest £12 pa.
This working out keeps all at an actual rate of 17p per unit (the average paid by households using 8,000, 4,000,3,000 and 2,000 collectively) although the bottom group still average 18p, the rest 17p but, significantly only the household with the most consumption pays more (£62.50), the others pay increasingly less with the poorest saving £57.50 pa.
(I show the sums at the end of this piece).
So, the first part of my Practical Manifesto for a Slightly Better Future is Reduce the Standing Charge to a Minimal Figure.
But, as the TV shopping channels say, there is more.
If we want to be an inclusive society, we should recognise that all should have access to basic utilities.
I wondered therefore about Making a Certain Quantity of Energy Free.
I did a sum assuming that all households got 570 free units each year. (an odd figure but for the example this generates as much revenue as the current model -actually £4 more)
I put the unit rate up to 20p.
Calculating this way means that the average price of a unit increases along with consumption, a feature that can only encourage energy saving.
On this model, comparing it with the current example above, the average household get a tiny reduction, the poorest still save over £100 a year (which they would possibly spend on energy) and those who consume the most pay £188 more. Further those who consume the most pay an average unit price of 19p while those who use the least only average 15p.
Practical? Easily – once details are worked out give this would apply both to gas and electricity so consideration would be given to allow for single fuel households and I do not think second homes should be eligible for example. There could also be some recognition of the number of people in a household.
