Prepayment meter Pricing
- Thread starter JohnD
- Start date
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How would you define an 'excess profit'? And how much of this profit is alleged to come from the poorest customers? Companies need to make a profit in order (among other things) to reinvest in the business. If there is no reinvestment, there is no future energy supply.
On the subject of prepayment meters, they do cost significantly more to administer than credit meters. I'm not sure of the current position, but it may be that there is already a significant subsidy for prepayment meters from credit customers.
I do have every sympathy for people trapped into paying higher costs by poverty, but the chancellor ought to be careful about interfering in the market even more than he does already, for the sake of a headline.
If he chose to impose a 'windfall' tax, we would all end up paying it.
On the subject of prepayment meters, they do cost significantly more to administer than credit meters. I'm not sure of the current position, but it may be that there is already a significant subsidy for prepayment meters from credit customers.
I do have every sympathy for people trapped into paying higher costs by poverty, but the chancellor ought to be careful about interfering in the market even more than he does already, for the sake of a headline.
If he chose to impose a 'windfall' tax, we would all end up paying it.
I did not mention excess profits.
You will be aware that "credit meter" customers are in a very competitive environment where they can shop around for the best deals, and that the incumbent suppliers charge their highest prices to those customers who are foolish, lazy or incompetent and do not move to an alternative supplier.
However the article goes on to say "Energywatch, the watchdog, claims energy consumers using pre-payment meters are charged annually an average £255 more than those paying by direct debit. The Treasury says research shows the actual extra cost to the companies of running the meters is £85 a year"
No doubt the energy companies will use the opportunity to put forward their own arguments.
£400m is chickenfeed in the UK energy market, but not to the poorest members of society who are stuck with prepayment tariffs. I do not begrudge SSE the £1,132 million pre-tax profit they made in 2007, nor Centrica their £2,111m; British Energy's £796m; International Power's £483m and National Grid's £1,751m. I do not know how much profit the foreign-owned companies made in the UK but I have not described it as excessive. That would be a different argument. I am more concerned here about the fairness of the highest prices being charged to those least able to afford them or to move to cheaper alternatives.
I see that "British Gas and EDF already offer pre-payment meters for poorer customers in line with their cheapest prices." and I applaud this.
You will be aware that "credit meter" customers are in a very competitive environment where they can shop around for the best deals, and that the incumbent suppliers charge their highest prices to those customers who are foolish, lazy or incompetent and do not move to an alternative supplier.
However the article goes on to say "Energywatch, the watchdog, claims energy consumers using pre-payment meters are charged annually an average £255 more than those paying by direct debit. The Treasury says research shows the actual extra cost to the companies of running the meters is £85 a year"
No doubt the energy companies will use the opportunity to put forward their own arguments.
£400m is chickenfeed in the UK energy market, but not to the poorest members of society who are stuck with prepayment tariffs. I do not begrudge SSE the £1,132 million pre-tax profit they made in 2007, nor Centrica their £2,111m; British Energy's £796m; International Power's £483m and National Grid's £1,751m. I do not know how much profit the foreign-owned companies made in the UK but I have not described it as excessive. That would be a different argument. I am more concerned here about the fairness of the highest prices being charged to those least able to afford them or to move to cheaper alternatives.
I see that "British Gas and EDF already offer pre-payment meters for poorer customers in line with their cheapest prices." and I applaud this.
I think all utility companies should be government owned and run.
Gas, elecrticity and water should be free to pensioners.
I bought a property that had a key meter that you had to charge up at the local convenience store. Man, the tariff was really high. First thing I did was change it.
Gas, elecrticity and water should be free to pensioners.
I bought a property that had a key meter that you had to charge up at the local convenience store. Man, the tariff was really high. First thing I did was change it.
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I think that's a load of bolllocks.
Would you include the retired MP on his huge pension? plenty of people over retirement age are better off than plenty of younger people.
Giving anything away free encourages its wasteful use. it also encourages all your children, grandchildren, friends and neighbours to come round and use your tumble-drier, heated swiming pool and electric sauna at my expense.
If you mean the pension is too low to allow pensioners to live in decency and warmth... then the pension is too low.
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namsag
Not read whats been put already but will give example of why prepayment meters cost more,, When BG first started credit card meters back in about 94 i was involved in the trial .
The first 1000 meters we put in nobody owed less than £2000 in arrears and all the company was allowed to charge them was £2.50 a week in back payments. This was in one county multiply that nationwide . Normal customers subsidise a large part of this why should we..
Also it costs companies a fortune to set up all those computer terminals in your corner shops and off licenses i as a direct debit customer don`t see why i should contribute to it.
As an example of how much extra it cost companies at about that time i was on approx £400 top line because of problems caused by prepayment meters coin /key and card i done a 1 week in 4 callout on them and was clearing over £ 750 for that week times that throughout the country it soon adds up
The first 1000 meters we put in nobody owed less than £2000 in arrears and all the company was allowed to charge them was £2.50 a week in back payments. This was in one county multiply that nationwide . Normal customers subsidise a large part of this why should we..
Also it costs companies a fortune to set up all those computer terminals in your corner shops and off licenses i as a direct debit customer don`t see why i should contribute to it.
As an example of how much extra it cost companies at about that time i was on approx £400 top line because of problems caused by prepayment meters coin /key and card i done a 1 week in 4 callout on them and was clearing over £ 750 for that week times that throughout the country it soon adds up
You know what I mean, means test it if necessary, its the "heat or eat" brigade that I am on about.
"Energywatch, the watchdog, claims energy consumers using pre-payment meters are charged annually an average £255 more than those paying by direct debit. The Treasury says research shows the actual extra cost to the companies of running the meters is £85 a year"
that might be what you meant, but it isn't what you said.
True
we already have means-tested benefits amd pension-top ups.
You mean they aren't high enough?
Why do we still have people who have to choose between food or heat.
The pension amount is a joke.
Hurrah for higher taxes and benefits!
will we vote for them?
http://www.thepensionservice.gov.uk/pensioncredit/home.asp
will we vote for them?
http://www.thepensionservice.gov.uk/pensioncredit/home.asp
It would never work, the govt would hijack the money for some other project, or pay an admin team to organise it 20% more than the revenue raised
If there was a choice and I knew that the extra tax went to needy pensioners I would vote for it (but many more wouldn't)
If there was a choice and I knew that the extra tax went to needy pensioners I would vote for it (but many more wouldn't)
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namsag
Will disagree with you there a bit bilous, food or heat yes there is a lot of pensioners in those circumstances and they should be helped but the vast majority of houses we fitted meters into or when we where allowed to reposse the meter had the biggest colour telle, sky with the full package and every mod con going is poverty not being able to keep yourself warm or not having the latest trainers or designer gear
Great idea for the government if they get the sums right.
They'll buy the leccy in bulk at a fixed price per pensioner, and use the 'free energy policy' to decrease pension amount, or limit pension increases on the back of "well we've paid your power bills for you, saving you xx amount" Where xx will be more than they are actually paying the power co's.
And I'm sure the suppliers would investigate, were they to suspect that the next door neighbour had an extension lead draped over the fence
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